Idaho Payroll Tax Guide (2026)
Idaho cut its base unemployment tax rate by 7.5% for 2026 and switched off the administrative reserve component entirely, but the taxable wage base rose from $55,300 to $58,300, so many employers will still owe more per worker.[5]
Idaho payroll at a glance
Idaho has two state payroll taxes, both simple: a flat 5.3% income tax employers withhold, and employer paid unemployment insurance that already folds the workforce development training fund into the published rate.[5]
What changed for Idaho payroll in 2026
Five items moved for Idaho employers this year. Anything below is what have changed since the 2025 tables, so a rate card carried over from last year will be wrong in at least one place.
2026 Idaho payroll tax calculator
Enter one employee’s annual gross wages to see what the employer owes, what comes out of the paycheque, and the true cost of employment.
Employer pays
Withheld from the employee
State income tax withholding is not included above: it depends on the employee’s Form ID W-4 and filing status, so it cannot be estimated from gross pay alone.
Payroll tax rates & the nexus question
Idaho runs four state payroll taxes. The table below is the whole state layer for 2026.[5]
The state payroll taxes
| Tax | Paid by | 2026 rate | Wage base |
|---|---|---|---|
| UI | Employer | 0.208%–5.400%; 1.000% new | $58,300 |
| Workforce Development Training Fund | Employer | 0.03% | $58,300 |
| Administrative Reserve Fund | Employer | 0.00% | $58,300 |
| Income tax withholding | Employee | 5.30% flat | No limit |
The 2026 class array runs from positive class 1 at 0.208% to deficit class 6 at 5.400%, with a standard rate of 1.000%. Every published rate already contains the workforce development training fund share, and the administrative reserve fund component is zero for all classes in 2026.[5]
Supplemental wages have their own rate. Bonuses, commissions and other supplemental payments are withheld at 5.30% when paid separately from regular wages. That is a state rate only; federal supplemental withholding is a separate 22% layer.[1]
Who has to register
Paying $1,500 or more in wages in a calendar quarter, or employing one or more workers in at least 20 weeks of a calendar year. Registering through the Idaho Business Registration application opens both the State Tax Commission withholding account and the Department of Labor unemployment account.[5] Income tax withholding is administered separately by Idaho State Tax Commission, so most employers end up with two state account numbers, not one.
Multistate and remote employees
When an employee works in more than one state, the four-part test below decides which state the wages are reported to. The tests run in order: you stop at the first one that gives an answer.
- 1. Localisation of service→
- 2. Base of operations→
- 3. Place of direction & control→
- 4. Employee’s residence
One remote employee is usually enough. A single person working from home in Idaho generally creates an obligation to register and report wages here, even if the business has no office, property or customers in the state.
Confused by Idaho’s payroll withholding & filing rules?
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Ask a Payroll SpecialistRegistration & return filing
Registration is online and free. The unemployment account and, where one exists, the withholding account are opened separately and carry different numbers.[5]
How to register
- Cross the wage threshold→
- Idaho Department of Labor Employer Portal→
- Receive account number→
- File & deposit online
Paying $1,500 or more in wages in a calendar quarter, or employing one or more workers in at least 20 weeks of a calendar year. Registering through the Idaho Business Registration application opens both the State Tax Commission withholding account and the Department of Labor unemployment account.[5]
Deposit schedule
The Tax Commission assigns each account a filing cycle of semimonthly, monthly, quarterly or annual. Semimonthly is due the 20th for the first half of the month and the 5th of the following month for the second half, monthly is the 20th of the following month, quarterly is the last day of the month after the quarter, and annual is the last day of January.[1]
Returns, reports & due dates
| Form | What it is | Due |
|---|---|---|
| Employer Quarterly Unemployment Insurance Tax Report, filed through the Employer Portal | Quarterly unemployment return | April 30, July 31, October 31, January 31 |
| Form 910 is the withholding payment return for every cycle. Form 967 is the annual… | Income tax withholding returns | The Tax Commission assigns each account a filing cycle of semimonthly, |
| Annual reconciliation | Year-end withholding reconciliation | January 31 |
| Form 941 | Federal quarterly return | Last day of the month after quarter end |
| Form 940 | Federal unemployment, annual | January 31 |
| New hire report | Report of newly hired employees | Within 20 days of start date |
Quarterly unemployment returns are due April 30, July 31, October 31, January 31. A return filed one day late is delinquent, and in most states the penalty attaches to the return, not the payment.[5]
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Subject wages vs. exempt payments
Not every dollar an employee receives is a taxable wage. The split below governs what goes into the unemployment wage base and what is reported at year end.[5]
Subject wages
- Salaries, hourly pay, overtime and piece rates
- Commissions, bonuses and incentive pay
- Most cash tips reported by the employee
- Vacation, holiday and paid sick leave when taken as wages
- Severance and payments in lieu of notice
- The cash value of meals and lodging provided as compensation
- Employer contributions to a non-qualified deferred compensation plan
Not subject
- Reimbursements of genuine business expenses under an accountable plan
- Employer contributions to a qualified retirement plan
- Employer-paid premiums for accident and health insurance
- Most third-party sick pay after the sixth calendar month
- Payments to a genuine independent contractor
- Workers compensation benefits
The wage base is per employer, per year, not per job. If you hire someone in August who already earned $58,300 elsewhere, your unemployment clock still starts at zero. The one exception is a successor employer taking over an existing payroll, who inherits the wages already paid.
Glossary of key terms
- Taxable wage base
- The slice of each employee’s annual pay that unemployment tax is calculated on. In Idaho that is $58,300 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
- Experience rating
- The method Idaho Department of Labor uses to set each employer’s own unemployment rate from its history of claims. Employers with fewer charged claims move down the schedule; those with more move up.
- New employer rate
- The rate assigned before an employer has enough history to be experience rated. It normally applies for two to three years, then the account moves onto the experience schedule.
- Form ID W-4
- The state withholding certificate. It sets how much income tax comes out of each cheque and is filed with the employer, not with Idaho State Tax Commission.
- Reserve account
- The running balance of contributions an employer has paid in, less the benefits charged against it. The ratio of that balance to taxable payroll is what drives the assigned rate.
- Successor employer
- A business that acquires another’s payroll may inherit both its experience rate and the wages already paid toward the wage base for the year. Getting this wrong is a common acquisition error.
- Localisation of service
- The first of four tests deciding which state a multistate employee’s wages are reported to. If substantially all the work is in one state, that state wins and the remaining tests are never reached.
- FUTA credit reduction
- A reduction in the 5.4% federal unemployment credit applied to states that have carried an outstanding federal loan for two or more consecutive Januaries. It raises the effective FUTA rate and is settled each November.
- Supplemental wages
- Bonuses, commissions, awards and similar payments made outside the regular payroll cycle. Many states set a separate flat withholding rate for them.
Idaho payroll tax, layer by layer
Federal tax applies everywhere and is the larger number. The state layer is what changes when you cross a border.
Layer 1: Federal
| Tax | Rate | 2026 base |
|---|---|---|
| Social Security | 6.2% each side | $184,500 |
| Medicare | 1.45% each side | No limit |
| Additional Medicare | 0.9% employee only | Over $200,000 |
| FUTA, standard | 0.6% net | $7,000 |
| Federal income tax | Per Form W-4 | No limit |
Idaho has no FUTA credit reduction for 2026, so the standard 0.6% net rate applies, $42 per employee. The final list is not published until 10 November 2026.[12]
Layer 2: State
| Tax | Rate | 2026 base |
|---|---|---|
| UI, new employer | 1.000% | $58,300 |
| UI, experienced | 0.208%–5.400% | $58,300 |
| Workforce Development Training Fund | 0.03% | $58,300 |
| Administrative Reserve Fund | 0.00% | $58,300 |
| Income tax, standard | 5.30% flat | No limit |
| Income tax, supplemental | 5.30% | No limit |
Layer 3, county & city: no payroll tax, but a wage floor
No county or city in Idaho levies its own payroll or income tax withheld by employers. The local layer shows up as minimum wage, not as tax.[9]
The state minimum wage is $7.25 an hour, which is the federal floor, effective 2009-07-24. The tipped cash wage is $3.35. No local ordinance sets a higher floor. Idaho’s state minimum wage equals the federal rate and no Idaho city or county sets a separate figure, so one rate applies statewide. The tipped cash wage of $3.35 and the 3.90 dollar tip credit come from the US Department of Labor tipped wage table dated 1 July 2026.[9]
Overtime exemption is a separate test. A salaried employee is exempt from overtime only above $35,568 a year ($684.00 a week) federal FLSA, and only if the duties test is also met. Paying a salary is not by itself enough.[11]
Idaho payroll FAQs
New employers pay the standard rate of 1.000% on the first $58,300 of each employee’s wages, which is up to $583 per worker. That total already includes the workforce development training fund share of 0.03%. There is no separate administrative reserve charge in 2026 because the component is set to zero.
The base rate fell 7.5% for 2026 but the taxable wage base rose from $55,300 to $58,300. For any employee earning above the base, the extra $3,000 of taxable wages can outweigh the rate cut. Compare dollars per employee rather than rates when you budget.
Multiply a separately issued supplemental payment by 5.3%. Idaho uses the same flat rate for supplemental wages as for regular wages, because the state income tax is a single flat rate. If the bonus is paid together with a regular payroll check, run the combined amount through the normal withholding tables.
The Tax Commission assigns you a semimonthly, monthly, quarterly or annual cycle and you report on Form 910 each period. Monthly filers pay by the 20th of the following month and quarterly filers by the last day of the month after the quarter. Form 967 and the W-2s are due by 31 January.
Register once you pay $1,500 in wages in a calendar quarter or employ someone in at least 20 weeks of a calendar year. The Idaho Business Registration application opens your State Tax Commission withholding account and your Department of Labor unemployment account in one step, so you do not apply twice.
No. Idaho’s minimum wage is $7.25 an hour, the same as the federal rate, and no Idaho city or county sets a different figure. Tipped employees may be paid a 3.35 dollar cash wage with a 3.90 dollar tip credit, provided tips bring them to at least $7.25 an hour for every hour worked.
$58,300 per employee per calendar year. Once an employee reaches that in wages from you, no further unemployment tax is due on that employee for the rest of the year. The count restarts on 1 January and does not carry over from a previous employer.
$7.25 an hour, which matches the federal floor. No local ordinance sets a higher rate. The tipped cash wage is $3.35.
April 30, July 31, October 31, January 31. A return is delinquent the day after the deadline even if the tax itself was paid on time, so file the return whether or not you can pay.
Sources & methodology
- Idaho State Tax Commission – Computing Withholding
- Idaho State Tax Commission – Withholding Due Dates
- Idaho State Tax Commission – Individual Income Tax Basics Guide and Tax Rate
- Idaho Department of Labor – Unemployment Tax Rates
- Idaho Department of Labor – Tax Rate Class Array 2026
- Idaho Department of Labor – Unemployment Insurance Tax Rates, Employer Portal
- Office of the Governor of Idaho – Idaho Businesses See Another 11 Million in Tax Savings
- US Department of Labor, Employment and Training Administration – Significant Provisions of State Unemployment Insurance Laws, January 2026
- US Department of Labor, Wage and Hour Division – State Minimum Wage Laws
- US Department of Labor, Wage and Hour Division – Minimum Wages for Tipped Employees
- US Department of Labor, Wage and Hour Division – Fact Sheet 17A, Exemption for Executive, Administrative, Professional, Computer and Outside Sales Employees
- Internal Revenue Service – FUTA Credit Reduction
- Bloomberg Tax – Idaho Releases 2026 Unemployment Rates, Wage Base
- Tax Foundation – State Individual Income Tax Rates and Brackets, 2026
Need help with Idaho payroll compliance?
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Running payroll in more than one state?
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