Utah Payroll Guide

 

Utah Payroll Tax Guide (2026)

Utah withholds a flat 4.45% from wages in 2026 under the April 2026 edition of Publication 14, and its unemployment contribution runs from 0.10 to 7.10% on the first $50,700 per worker, a base more than seven times Tennessee’s.[4]

10 min read • Reviewed by Rajanikant Patel CPA • Verified • Sources: USTC, DWS, IRS
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Quick Facts

Utah payroll at a glance

Utah has two state payroll taxes: a flat income tax withheld from employee pay, and unemployment insurance contributions funded entirely by the employer on an unusually high 50,700 dollar wage base.[4]

State income tax withholding
4.45% flat [1]
UI taxable wage base
$50,700 per employee [4]
Experienced UI rate range
0.10%–7.10% [4]
Employee-paid state payroll tax
None [4]
Social cost
0.10% [4]
Social Security wage base
$184,500 [2]
FUTA net rate
0.6% = $42 per employee [12]
State minimum wage
$7.25 per hour (federal floor) [9]
Local minimum wage ordinances
None [9]
UI registration trigger
Coverage reaches an employing unit that employs one or more individuals… [4]
Exempt salary threshold
$35,568 per year [11]
Additional Medicare threshold
Over $200,000, employee only [3]
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What changed for Utah payroll in 2026

Six items moved for Utah 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.

Withholding rate now 4.45% UI wage base rises to 50,700 Rate range 0.10 to 7.10% Reserve factor set at 1.10 Social cost fixed at .001 Federal salary test back to 684
Importing a low wage base assumption into Utah: Utah taxes unemployment on the first $50,700 a worker earns in 2026, while many neighbouring states stop between 7,000 and $15,000. An employer that moves payroll into Utah and keeps its old accrual assumptions will run out of budget by mid year, because a single employee at the 7.1% maximum costs $3,599.70 rather than a few hundred. The social cost of .001 also means no Utah employer, however clean its record, ever gets to a zero rate.
Estimate

2026 Utah 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.

Utah · 2026 rates · per employee, per calendar year
Cash wages subject to payroll tax, before any withholding.
Your exact rate is on the Written notice of the assigned contribution rate and the factors used to set it, issued after rates are calculated early in December for the following calendar year.
FUTA is 6.0% less a 5.4% credit where the state has no outstanding federal loan.

Employer pays

UI, on first $50,700–
Social cost, on first $50,700–
FUTA, on first $7,000–
Social Security, 6.2%–
Medicare, 1.45%–
Employer payroll tax–

Withheld from the employee

Social Security, 6.2%–
Medicare, 1.45%–
Additional Medicare, 0.9% over $200,000–
Withheld from employee–
True cost of employment–
Employer tax as % of wages–
Total payroll tax, both sides–

State income tax withholding is not included above: it depends on the employee’s Federal Form W-4; Utah has no separate state withholding certificate and employers withhold based on the employee’s federal W-4 and the Utah withholding schedules and filing status, so it cannot be estimated from gross pay alone.

Rates & Nexus

Payroll tax rates & the nexus question

Utah runs three state payroll taxes. The table below is the whole state layer for 2026.[4]

The state payroll taxes

TaxPaid by2026 rateWage base
UIEmployer0.10%–7.10%$50,700
Social costEmployer0.10%$50,700
Income tax withholdingEmployee4.45% flatNo limit

Utah does not use lettered schedules. An experienced employer’s overall rate is its benefit ratio multiplied by the reserve factor plus the social cost. For 2026 the reserve factor is 1.10 and the social cost is fixed at .001 for all employers, producing a minimum overall rate of 0.1% and a maximum of 7.1%. A one percent surcharge is added if the employer or the previous owner of the business has unpaid contributions for the prior fiscal year. New employers are not given a flat rate; they take the two year average benefit ratio of their industry, and new out of state contractors are assigned the 7.1% maximum unless they purchase an existing business. Utah assigns no flat new employer rate. A new employer takes the two-year average benefit ratio for its industry; out-of-state contractors are assigned the 7.1% maximum.[4]

Who has to register

Coverage reaches an employing unit that employs one or more individuals for some portion of a day during a calendar year. The federal tests bring in an employer that paid wages of $1,500 or more in any calendar quarter or employed one or more workers at any time in each of 20 calendar weeks. Domestic service is covered at $1,000 or more of cash wages in a calendar quarter. Agricultural employment is covered at $20,000 or more of total wages in a calendar quarter or more than ten employees in 20 different weeks during the calendar year. A 501(c)(3) organization is covered with four or more individuals employed for some portion of a day in each of 20 different weeks.[4] Income tax withholding is administered separately by Utah 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 Utah generally creates an obligation to register and report wages here, even if the business has no office, property or customers in the state.

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Compliance

Registration & return filing

Registration is online and free. The unemployment account and, where one exists, the withholding account are opened separately and carry different numbers.[4]

How to register

  • Cross the wage threshold→
  • Employer online services at jobs.utah.gov→
  • Receive account number→
  • Written notice of the assigned contribution rate and the factors used to set it, issued after rates are calculated early in December for the following calendar year→
  • File & deposit online

Coverage reaches an employing unit that employs one or more individuals for some portion of a day during a calendar year. The federal tests bring in an employer that paid wages of $1,500 or more in any calendar quarter or employed one or more workers at any time in each of 20 calendar weeks. Domestic service is covered at $1,000 or more of cash wages in a calendar quarter. Agricultural employment is covered at $20,000 or more of total wages in a calendar quarter or more than ten employees in 20 different weeks during the calendar year. A 501(c)(3) organization is covered with four or more individuals employed for some portion of a day in each of 20 different weeks.[4]

Deposit schedule

Everyone files quarterly, but payment timing splits at $1,000 a month. An employer withholding less than $1,000 a month files and pays quarterly, by the last day of the month after the quarter. An employer withholding $1,000 or more a month still files quarterly but pays monthly, by the last day of each following month.[1]

Returns, reports & due dates

FormWhat it isDue
Employer’s Quarterly Wage List and Contribution Report; online filing is the required reporting optionQuarterly unemployment returnApril 30, July 31, October 31, January 31
Form TC-941E is the quarterly return and must be filed electronically; mineral…Income tax withholding returnsEveryone files quarterly, but payment timing splits at $1,000 a mo
Annual reconciliationYear-end withholding reconciliationJanuary 31
Form 941Federal quarterly returnLast day of the month after quarter end
Form 940Federal unemployment, annualJanuary 31
New hire reportReport of newly hired employeesWithin 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.[4]

Watch the rate you actually withhold on: Publication 14, revised April 2026, directs employers to withhold at 4.45%. An older historical rate listing on the Tax Commission site still shows 4.55%; Publication 14 is the operative source.[1]
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Wage Base

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.[4]

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 $50,700 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.

Reference

Glossary of key terms

Taxable wage base
The slice of each employee’s annual pay that unemployment tax is calculated on. In Utah that is $50,700 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
Experience rating
The method Utah Department of Workforce Services 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.
Federal Form W-4; Utah has no separate state withholding certificate and employers withhold based on the employee’s federal W-4 and the Utah withholding schedules
The state withholding certificate. It sets how much income tax comes out of each cheque and is filed with the employer, not with Utah 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.
Federal, State & Local

Utah 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

TaxRate2026 base
Social Security6.2% each side$184,500
Medicare1.45% each sideNo limit
Additional Medicare0.9% employee onlyOver $200,000
FUTA, standard0.6% net$7,000
Federal income taxPer Form W-4No limit

Utah 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

TaxRate2026 base
UI, experienced0.10%–7.10%$50,700
Social cost0.10%$50,700
Income tax, standard4.45% flatNo limit

Layer 3, county & city: no payroll tax, but a wage floor

No county or city in Utah 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 $2.13. No local ordinance sets a higher floor. The United States Department of Labor lists Utah at a basic minimum rate of $7.25 an hour, matching the federal floor, with a 2.13 dollar cash wage for tipped employees and a maximum tip credit of $5.12. No Utah city or county rate appears in the federal listing.[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 standard salary level, and only if the duties test is also met. Paying a salary is not by itself enough.[11]

FAQ

Utah payroll FAQs

Publication 14, the Utah Withholding Tax Guide revised 04/26, instructs employers to multiply taxable wages by .0445, which is 4.45%. Utah is a flat rate state, so the same percentage applies at every income level. Employers withhold based on the employee’s federal Form W-4 and the Utah withholding schedules, because Utah has no separate state withholding certificate.

Every employer files quarterly on Form TC-941E, which must be filed electronically. Payment timing depends on size: below $1,000 withheld a month you pay with the quarterly return, and at $1,000 or more a month you pay monthly by the last day of the following month. The annual reconciliation is folded into the fourth quarter return rather than filed separately, so the deadline is 31 January.

An experienced employer’s overall rate is its benefit ratio multiplied by the reserve factor, plus the social cost. For 2026 the reserve factor is 1.10 and the social cost is fixed at .001 for all employers. The result is capped between a 0.1% minimum and a 7.1% maximum, and a one percent surcharge is added if the employer or a previous owner has unpaid contributions from the prior fiscal year.

There is no single new employer rate. Utah assigns a new employer the two year average benefit ratio of its own industry, then applies the same reserve factor and social cost as everyone else. The exception is new out of state contractors, who are assigned the 7.1% maximum allowable under state law unless they purchase an existing business.

During 2026 the taxable wage base is $50,700. At the 7.1% maximum overall rate that is $3,599.70 a year for one fully taxed employee, and at the 0.1% minimum it is $50.70. This is one of the widest ranges in the country, so experience rating matters far more in Utah than in a low wage base state.

Utah sits at the federal floor of $7.25 an hour, according to the United States Department of Labor listing revised 1 July 2026. Tipped employees may be paid a cash wage of $2.13 an hour with a maximum tip credit of $5.12, provided tips make up the difference. No Utah city or county appears in the federal listing with a higher local rate.

$50,700 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 $2.13.

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.

Verification

Sources & methodology

  1. Utah State Tax Commission – Publication 14, Withholding Tax Guide (Rev. 04/26)
  2. Utah State Tax Commission – Withholding Taxes
  3. Utah State Tax Commission – Individual Income Tax Rates
  4. Utah Department of Workforce Services – Unemployment Insurance Contribution and Tax Rates
  5. Utah Department of Workforce Services – Employer Handbook Frequently Asked Questions
  6. Utah Department of Workforce Services – Unemployment Insurance Employer Handbook
  7. Utah Department of Workforce Services – Employer Home, Unemployment Insurance
  8. United States Department of Labor, Employment and Training Administration – Significant Provisions of State Unemployment Insurance Laws, January 2026
  9. United States Department of Labor, Wage and Hour Division – State Minimum Wage Laws
  10. United States Department of Labor, Wage and Hour Division – Minimum Wages for Tipped Employees
  11. United States Department of Labor, Wage and Hour Division – Salary Levels for the Executive, Administrative and Professional Exemption
  12. Internal Revenue Service – Topic no. 759, Form 940 and Federal Unemployment Tax
  13. United States Department of Labor, Employment and Training Administration – FUTA Credit Reductions
  14. Social Security Administration – Contribution and Benefit Base
Methodology: every rate, threshold and due date on this page was taken from the administering agency’s own published material for the 2026 tax year, checked on Oct 1, 2026. Where a federal figure applies it comes from the IRS, SSA or US Department of Labor. 6 data points on this page could not be confirmed against a primary source and are either omitted or marked as not published, rather than estimated. Rates change, and some change mid-year, so confirm against your own rate notice before running a payroll.
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