Payroll tax in Alaska: What employers need to know [2024]

As an employer, you have many obligations and responsibilities. Whether you’re running a successful small business in Alaska or planning to expand your company to the US’s northernmost state, mastering state payroll tax laws is one of those obligations. But that’s not all. Employers in the United States are also responsible for dealing with federal income taxes and FICA taxes, including Medicare and Social Security contributions.

Alaska is the only state in the US that has no personal income tax and no sales tax. Better still, its corporate tax rates are on the lower side, making it even more attractive to employers and employees alike. 

Regardless of the size of your business, if you have employees in the state of Alaska, you need a clear understanding of state payroll taxes, their rates, who owes what, and the deadlines. In this guide, we’ll review all of that and more.

Alaska state unemployment insurance tax

Unlike many other states, Alaska only has one state payroll tax: the state unemployment insurance tax (SUI). The unemployment tax is collected to fund unemployment benefits for workers who experience job loss due to circumstances beyond their control, such as layoffs. The Alaska Department of Labor and Workforce Development’s Employment Security Tax Division is responsible for administering SUI tax at the state level. Business owners can pay taxes, manage their state unemployment tax, and perform other administrative functions via the MyAlaska online portal.

Employers have several obligations when it comes to Alaska SUI. First, they must abide by Alaska’s new hire reporting laws, which state that all employers must report new hires within 20 days of the new employee’s start date. The government requires employers to submit the following information online:

• Employee name, address, and Social Security Number
• Employer’s federal tax ID number (also known as your EIN)
• Employer’s name and address

According to the Alaska Department of Labor and Workforce Development, the unemployment insurance tax rate for new employers in 2023 can be determined by adding the annual taxable wage base to the current employee rate—which is $47, 100 and 0.51, respectively.

For Alaska employers with an experience rating from the Employment Security Tax Division, the unemployment insurance tax rate for 2024 ranges from 1% to 5.4%. The Employment Security Tax Division will determine the experience rate each year by reviewing the employer’s quarterly payroll reporting history. You’ll be sent a notice in the mail once a year with crucial information, like your unemployment insurance tax rate, the annual taxable wage base, and the employee tax rate, by the Alaska Department of Labor and Workforce Development.

In addition to Alaska’s unemployment tax, employers must also contribute to federal unemployment taxes, per the terms of the Federal Unemployment Tax Act (FUTA).

Navigating payroll tax laws in Alaska can be challenging, but Rippling’s payroll compliance software makes it easy. Rippling automatically calculates your taxes and submits your tax forms and payments for you—monitoring tax laws at the federal and Alaska state levels to ensure full compliance. Rippling PEO takes it a step further: It can register and maintain your state tax accounts for you, automating even more of the payroll tax process.

Payroll tax due dates in Alaska

Alaska employers must pay SUI taxes to the Alaska Department of Labor and Workforce Development on a quarterly basis, along with filing a contribution report. The deadlines are as follows:

• First quarter (January-March): Due April 30
• Second quarter (April-June): Due July 31
• Third quarter (July-September): Due October 31
• Fourth quarter (October-December): Due January 31

If one of these dates falls on a weekend or a federal holiday, you must complete your tax filing responsibilities by the following business day. 

How to submit payroll taxes in Alaska

We’ve reviewed what you need to know about Alaska state unemployment insurance tax and the due dates for your payments. Now, you’re probably asking: How can I file my taxes in the state of Alaska? We’ll cover that below. 

Enroll in MyAlaska 

The Alaska state government encourages everyone to pay online using its MyAlaska portal. Companies with 50 or more employees are required to complete all payroll-related tasks online. You can send in SUI payroll tax reports using the portal’s TaxWeb tool, as well as make payments and complete other tasks. The Department of Labor and Workforce Development has some simple online instructions about setting up an account and making payments.

Rippling’s full-service payroll software

Looking for a payment option that’s even easier than MyAlaska? Rippling’s payroll software eliminates all the manual work related to tax filing; in fact, it practically runs itself. With Rippling, your compliance work is automated, and your federal and Alaska state payroll taxes get filed at the right time with the proper authorities.

FAQs about Alaska payroll taxes

Are there local tax laws in Alaska?

Yes. While the government of Alaska doesn’t levy state taxes, like an individual income tax or a state sales tax, it does permit municipalities in the Last Frontier to charge their own local taxes. Depending on where they’re located, business owners may need to pay a local sales tax.

Can your tax returns be audited in Alaska?

Yes, the State of Alaska Department of Administration Division of Finance reserves the right to audit the income tax returns of businesses and individuals alike to ensure they adhere to the correct tax rates and pay the proper amount of taxes.

Are nonprofit organizations subject to payroll taxes in Alaska?

Yes. The state of Alaska doesn’t grant tax exemptions; this falls under the purview of the IRS. And according to the Employment Security Tax Division, nonprofits in the Last Frontier are subject to paying state unemployment tax if they meet one or both of the following eligibility criteria:

• They pay an employee $250 or more in a quarter (“quarter” refers to the four quarters of the calendar year, not any specific fiscal year).
• They have four or more employees for some part of the day for 20 weeks in either this year or the preceding calendar year. These employees could be working for the nonprofit at the same or at different times, and the 20 weeks don’t have to be consecutive.

Disclaimer: Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.