Nebraska Payroll Tax Guide (2026)

Nebraska’s top income tax rate fell to 4.55% for 2026 under the schedule written into statute, the minimum wage reached $15 on 1 January, and combined unemployment tax runs from 0.00 to 1.19% for nineteen of the twenty rate categories.^[5]

10 min read • Reviewed by Rajanikant Patel CPA • Verified Oct 1, 2026 • Sources: NDOR, NDOL, IRS

Quick Facts

Nebraska payroll at a glance

Nebraska has two state payroll taxes: graduated income tax withholding deducted from employee pay, and a combined unemployment insurance tax that employers alone pay on the first $9,000 of each worker’s wages.^[5]

State income tax withholding

2.46%–4.60% ^[2]

UI taxable wage base

$9,000 per employee ^[5]

New employer UI rate

1.25% ^[5]

Experienced UI rate range

0.00%–5.40% ^[5]

Employee-paid state payroll tax

None ^[5]

Social Security wage base

$184,500 ^[2]

FUTA net rate

0.6% = $42 per employee ^[14]

State minimum wage

$15.00 per hour ^[9]

Local minimum wage ordinances

None ^[9]

UI registration trigger

Paying wages of $1,500 or more in any calendar quarter in the current or… ^[5]

Exempt salary threshold

$35,568 per year ^[13]

Additional Medicare threshold

Over $200,000, employee only ^[3]

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What changed for Nebraska payroll in 2026

Six items moved for Nebraska 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.

Top income tax rate falls to 4.55% New 2026 Circular EN tables Minimum wage reaches $15 Youth wage of 13.50 from 17 July SUIT share set at 20% for 2026 UI wage base holds at 9,000/24,000

Running every employee against a single 9,000 dollar wage base: Nebraska has two wage bases, not one. Employers ranked into category 20, the lowest reserve ratio band, pay 5.40% on the first $24,000 of each worker’s wages instead of the first $9,000. New construction employers are assigned the category 20 rate of 5.40%, so check the wage base printed on your rate notice before the first quarter closes. A payroll file capped at $9,000 for a category 20 employer will under-report all year.^[6]

Estimate

2026 Nebraska 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.

Nebraska · 2026 rates · per employee, per calendar year

Annual gross wages ($)

Cash wages subject to payroll tax, before any withholding.

Your UI contribution rate

Your exact rate is on the annual tax rate notice explaining the rate calculation, issued by the Nebraska Department of Labor.

Custom UI rate (%)

FUTA basis

FUTA is 6.0% less a 5.4% credit where the state has no outstanding federal loan.

Employer pays

UI, on first $9,000–

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 Form W-4N, Nebraska Employee’s Withholding Allowance Certificate and filing status, so it cannot be estimated from gross pay alone.

Rates & Nexus

Payroll tax rates & the nexus question

Nebraska runs two 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	0.00%–5.40%; 1.25% new	$9,000
Income tax withholding	Employee	2.46%–4.60%	No limit

Nebraska ranks employers by reserve ratio and divides them into 20 categories, each holding roughly 5% of total taxable wages. For calendar year 2026 categories 1 through 19 run from 0.00% to 1.19% and category 20 pays 5.40% on a 24,000 dollar wage base rather than $9,000. The average employer sits in category 12 at 0.55% of the first $9,000. New construction employers are assigned the category 20 rate of 5.40%, while other new employers pay 1.25%. For 2026 the state allocates 20.0% of combined tax collections to the State Unemployment Insurance Trust Fund.^[5]

Supplemental wages have their own rate. Bonuses, commissions and other supplemental payments are withheld at 3.5% when paid separately from regular wages. That is a state rate only; federal supplemental withholding is a separate 22% layer.^[2]

Who has to register

Paying wages of $1,500 or more in any calendar quarter in the current or preceding calendar year, or employing one or more individuals during 20 different calendar weeks in the current or preceding calendar year.^[5] Income tax withholding is administered separately by Nebraska Department of Revenue, 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 Nebraska 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.^[5]

How to register

Cross the wage threshold→
NEworks→
Receive account number→
annual tax rate notice explaining the rate calculation, issued by the Nebraska Department of Labor→
File & deposit online

Deposit schedule

Form 941N is quarterly by default and is due on or before the last day of the month following the end of the quarter. If more than $500 was withheld in the first or the second month of a quarter, you must deposit for that month by the 15th day of the following month. Annual filing is available only to employers licensed by the department to file annually, with the return due by 31 January.^[2]

Returns, reports & due dates

Form	What it is	Due
Combined Tax Report filed in NEworks; the paper equivalents are Form UI-11T for the tax report and Form UI-11W for the wage report	Quarterly unemployment return	April 30, July 31, October 31, January 31
Form 941N, Nebraska Income Tax Withholding Return, quarterly or monthly, and Form…	Income tax withholding returns	Form 941N is quarterly by default and is due on or before the last day
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]

Watch the rate you actually withhold on: Two rates coexist legitimately. Statute 77-2715.03 sets 4.55% for the employee’s own return, while the 2026 Circular EN percentage-method tables employers must use from 1 January 2026 top out at 4.60%. Employers withhold on 4.60%.^[2]

Pricing

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Setup fee

one-time onboarding

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Every payroll run

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Off-cycle payroll

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billed
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Year-end filings

W-2s, 1099s & more

billed
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All you actually pay

Per employee, per pay run

$6 /emp

Plus a flat $40 minimum per pay run. That’s the whole bill.

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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.^[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 $9,000 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 Nebraska that is $9,000 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
Experience rating: The method Nebraska 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 W-4N, Nebraska Employee’s Withholding Allowance Certificate: The state withholding certificate. It sets how much income tax comes out of each cheque and is filed with the employer, not with Nebraska Department of Revenue.
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

Nebraska 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

Nebraska 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.^[14]

Layer 2: State

Tax	Rate	2026 base
UI, new employer	1.25%	$9,000
UI, experienced	0.00%–5.40%	$9,000
Income tax, standard	2.46%–4.60%	No limit
Income tax, supplemental	3.5%	No limit

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

No county or city in Nebraska 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 $15.00 an hour, effective 2026-01-01. The tipped cash wage is $2.13. No local ordinance sets a higher floor. One statewide rate applies and no Nebraska city or county minimum wage is in force. The Department of Labor lists Nebraska’s basic rate as applying to employers with four or more employees. Tipped employees may be paid a cash wage of $2.13 an hour so long as tips bring them to the full minimum wage. A separate Nebraska minimum wage of $13.50 an hour for 14 and 15 year olds took effect on 17 July 2026, so employers of minors have two rates to track for the rest of the year.^[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.^[13]

FAQ

Nebraska payroll FAQs

The 2026 Circular EN lets an employer withhold on supplemental wages paid at a different time from regular wages by using a flat 3.5% withholding rate. The alternative is to combine the supplemental payment with regular wages and run the normal tables. Whichever you choose, apply it consistently across the year.

For larger employers, yes. The Circular EN states that every employer with more than 24 employees must withhold at least 1.5% of each employee’s taxable wages. A lesser amount may be withheld only if the employee provides documentation justifying it. This floor is easy to miss when an employee’s Form W-4N would otherwise produce very little withholding.

Form 941N is quarterly by default. If more than $500 was withheld in the first or the second month of a quarter, you must deposit for that month by the 15th day of the following month. Annual filing is available only to employers the department has licensed to file annually.

Most Nebraska employers use $9,000. Employers ranked into category 20 use $24,000 and pay 5.40%. Your annual rate notice shows the category you fall into, and the categories are rebuilt each year from reserve ratios, so an employer can move in or out of category 20 between years.

The Nebraska minimum wage is $15.00 an hour as of 1 January 2026. Effective 17 July 2026 there is a separate rate of $13.50 an hour for 14 and 15 year olds. Employees paid by tips or gratuities may receive a cash wage of $2.13 an hour, which means a maximum tip credit of $12.87.

New non-construction employers are assessed 1.25% for calendar year 2026. New construction employers are assessed the category 20 rate of 5.40%. Both pay on taxable wages up to the wage base shown on their rate notice, and you become liable once you pay $1,500 in wages in a calendar quarter or have someone in employment for 20 different calendar weeks.

$9,000 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.

$15.00 an hour. 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

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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