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

Employers throughout the US need to navigate payroll taxes to maintain a compliant and smoothly operating business. While federal regulations set the baseline for payroll tax requirements, companies based in Louisiana or that have Louisiana-based employees are also accountable for state payroll taxes.

Louisiana follows a progressive tax structure. Put simply, as your employees' compensation increases, so do their tax liabilities. Likewise, if your business is thriving and your employee count is growing, your contributions as an employer will escalate alongside the tax withholding obligations from your employees' paychecks. As an employer in the Pelican State, understanding payroll tax intricacies will help you avoid potential pitfalls, such as audits or late-payment penalties, and keep your business on track.

Whether your enterprise is a small business or a multinational corporation, this guide will explain your Louisiana payroll tax obligations for your employees in New Orleans, Baton Rouge, Lafayette, and elsewhere. Read on to learn about Louisiana tax rates, deductions, reporting procedures, and more. 

The 2 Louisiana payroll taxes

The Louisiana Department of Revenue oversees payroll taxes in the state. All employers are required to withhold income tax from nonresident and resident employees working within Louisiana, except for those who are exempt from income tax withholding. Employers must also pay unemployment tax.

In Louisiana, there are no local city taxes, so you only deduct for state income taxes. However, employers should note that they will also owe federal taxes. This includes federal income tax withholdings, as well as Federal Insurance Contributions Act (FICA tax) contributions from both the employer and employee. FICA covers Medicare tax and Social Security tax.

Unemployment insurance tax

Unemployment insurance provides financial assistance to eligible workers who have lost their jobs through no fault of their own while they seek new employment. Louisiana’s state unemployment insurance (UI) is part of the US Department of Labor’s program under the Social Security Act.

The total amount of unemployment compensation tax owed will depend on the employee’s wages and the assigned tax rate. Tax rates vary depending on how long employers have been operating. An “experienced” employer has been operating long enough that their rates can be based on their average annual taxable payroll for the last three completed fiscal years. “New” employers, on the other hand, pay an average rate for their industrial classification for the first two to three years.

In addition to the state unemployment tax, Louisiana employers also pay into federal unemployment tax under the Federal Unemployment Tax Act (FUTA). Employers who pay state unemployment insurance (SUTA) on time get a discount of up to 5.4% on federal unemployment tax.

If you are late to pay this tax, you could face fines. Penalties begin at 5% of the total amount due for the quarter or $25, whichever amount is greater. After 30 days, additional penalties will accrue, with the total penalty maxing out at 25% of the amount due for the quarter or $125, whichever amount is greater.

Personal income tax

Personal income tax is a levy imposed on an individual's earnings, which includes their wages, salaries, investments, and other sources of income. In Louisiana, employees pay both federal income tax as well as Louisiana income tax, and estimated taxes should be withheld from their paychecks. Income tax rates vary based on the individual's total income or their joint income with a spouse.

To calculate income tax deductions, you could use a paycheck calculator or a complicated spreadsheet. Or you could make things easy with Rippling’s payroll software. Rippling not only automatically calculates your taxes and submits your tax forms and payments on your behalf, but it also monitors tax laws at both the federal and state levels so you stay compliant no matter where your employees are based.

Payroll tax due dates in Louisiana

Payroll tax deadlines for income tax withholdings depend on how much the employer is withholding in total. Employers who withhold less than $500 per month from all their employees must pay that withheld income tax on a quarterly basis. Those who withhold between $500 and $5,000 must pay on a monthly basis, and those who withhold $5,000+ per month must pay on a semi-monthly basis. State unemployment taxes are due quarterly.

Here are the quarterly due dates for payment of quarterly returns and withheld income tax, as well as unemployment tax. Note that they are on the last day of the next month after the end of the quarter. If that date is on a holiday or weekend, the due date is the next business day:

• 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

Monthly payments for withheld income are due on the last day of the month. Semi-monthly payments are due both on the 15th and the last day of the month.

How to submit payroll taxes in Louisiana

Now that you understand what payroll taxes are due—and when they’re due—you may be wondering how to submit them. First, companies operating in Louisiana will need to register with the Louisiana Revenue Department to pay Louisiana employees. New Louisiana employees should complete 1-9 validation, W4 forms, and the Louisiana Form L4 for state taxes.

Employers must also register with the Louisiana Workforce Commission (LWC), which will determine whether you owe unemployment insurance taxes and, if so, will issue you an unemployment state identification number. You must file wage reports to the LWC quarterly or else you may face penalties. Wage reports must be filed online.

After that, you can develop your payroll process and choose how to submit tax payments.

Unemployment insurance taxes:

Submit online

Payments can be submitted online via the Louisiana Wage and Tax System (LAWATS) through the Louisiana Workforce Commission. The system accepts electronic funds transfers (EFTs). Payment vouchers can be printed and sent in with a check, but you must use their online system to obtain the voucher and information.

Withholdings and other taxes:

File electronically via the Louisiana Taxpayer Access Point (LaTAP)

On the Louisiana Taxpayer Access Point website, employers can easily handle several services online, including:

• Register a business
• Make payments
• Find tax information
• Submit documents to the Louisiana Department of Revenue

See the LaTAP website for more. 

Express pay by credit card

The Louisiana Department of Revenue has a business tax portal where you can view your tax history, schedule payments or reminders, verify payments, and more. There, you can pay Louisiana taxes by credit card.

File by mail

Louisiana allows taxpayers to send some tax forms and payments by mail. To do so, you’ll first want to go to the Louisiana Department of Revenue's Online Payment Voucher System. There, you can generate a payment voucher which you can send by mail along with your payment. Vouchers and payments should go to the following address:

Louisiana Department of Revenue

P.O. Box 91017

Baton Rouge, LA 70821-9017

However, if payments are paid more frequently than monthly (in the case of bimonthly payments), then they must always be submitted electronically. 

Rippling’s full-service payroll software

Rippling provides an even simpler option for tax payments by taking on the hard work for you. Rippling’s payroll software automates all your compliance work and files your federal and Louisiana state taxes on time, with the right agencies. Better yet, Rippling’s PEO can register and maintain your state tax accounts for you, automating even more of the payroll tax process. Staying compliant has never been easier.

FAQs about Louisiana payroll taxes

Are there local tax laws in Louisiana?

There are some local tax laws in Louisiana. For example, sales tax is collected at the state, local, parish, or even municipality level. However, local tax laws do not apply to payroll taxes.

Can your tax returns be audited in Louisiana?

Yes, your tax returns can be audited in Louisiana. You may be federally audited on your federal tax returns, which would be carried out by the Internal Revenue Service (IRS), while state audits focus on state tax returns and are carried out by the Department of Revenue. If your state returns are being audited, you will receive a written notice from a Louisiana Department of Revenue auditor, which will include information about the audit and for which years you need to provide documentation.

Are nonprofit organizations subject to payroll taxes in Louisiana?

Yes, nonprofit organizations are subject to payroll taxes even if they are otherwise tax-exempt.

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.