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

Dealing with taxes can be a headache, no matter how prepared you are. As a business owner in Oklahoma, you have to navigate both federal and state payroll tax laws—on top of the Federal Insurance Contributions Act (FICA) requirements like Social Security and Medicare taxes, there are also state payroll taxes that you'll need to consider.

Oklahoma has a progressive tax system. This means your employees' tax rates increase with their income, leading to higher tax liability. If your business grows and you hire more people, your employer tax contributions and deductions will also increase.

Managing a remote workforce or a small business in Oklahoma? It’s crucial to understand your state tax obligations. We’ll guide you through the different tax types, their rates, who they apply to, how to pay them, and more.

The 2 Oklahoma payroll taxes

The Oklahoma Tax Commission administers the state's payroll taxes. Oklahoma has two types of payroll taxes you need to be aware of: unemployment insurance and income tax.

Employers must withhold taxes from the paychecks of Oklahoma resident and nonresident employees who work in the state. As per state laws, new hires must be reported to the Oklahoma Employer New Hire Reporting System within 20 days of their hiring date, to ensure they’re accounted for during payroll tax withholdings. 

Unemployment insurance tax

In Oklahoma, employers must pay state unemployment insurance tax to provide financial support to workers who lose their jobs due to external factors. This tax is paid to the Oklahoma Employment Security Commission (OESC), which handles the state unemployment tax to fund the Oklahoma Unemployment Insurance (UI) Trust Fund.

Under the Federal Unemployment Tax Act (FUTA), Oklahoma employers must pay both the federal and state unemployment tax. Employers withhold 6% on the first $7,000 of an employee's wages for FUTA. According to the IRS, employers may qualify for a 5.4% tax credit on federal unemployment contributions.

Note that the new employer tax rate differs from established businesses in the table below.

State income tax

Employers in Oklahoma must deduct state income tax from their employees' wages and remit it to the Oklahoma Tax Commission's withholding tax division. This applies to all employers who pay wages that are subject to state income tax withholding, whether the employee is a resident or nonresident of the state. New employers can fill out form OK-W-4 to start paying taxes.

It’s the employer’s responsibility to stay up to date with Oklahoma state tax rates, laws, and tables to ensure accurate employee withholdings and take-home pay.

Managing payroll taxes can be daunting for employers. Along with federal taxes, employers must calculate Oklahoma payroll taxes accurately; mistakes may result in fines and penalties.

However, Rippling’s payroll compliance software can simplify the process by automating tax calculations, submitting forms and payments, and keeping tabs on any changes in federal, state, and local tax regulations to ensure compliance. Even better, Rippling’s PEO can help register and manage your Oklahoma state tax accounts, automating even more of your payroll tax work.

Payroll tax due dates in Oklahoma

Keeping up with payroll taxes and due dates is vital for every business. Like many other states, Oklahoma has strict deadlines for payroll tax submissions, and non-compliance may result in penalties. 

Oklahoma unemployment insurance taxes are due to the Oklahoma Employment Security Commission on a quarterly basis:

• 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

Employers must file their income tax withholding returns every quarter and submit payments to the Oklahoma Tax Commission (OTC). The income tax withholding schedules provide a graduated tax rate employers must deduct from their employees’ gross pay for each pay period. The payment deadlines are as follows:

• If the company withholds less than $500 per quarter, payments are due on the 20th of the month following the close of the quarter
• If the company withholds more than $500 per quarter, payments are due on the 20th of the following month
• If the company withholds $10,000 per month or more, payments are due on the 20th and 30th of each month

For the quarterly schedule, if the due date falls on Saturday, Sunday, or a legal holiday, the due date is the next banking day.

How to submit payroll taxes in Oklahoma

Now that you’re up to speed with the taxes you must collect and when you must pay them, the next step is to file them. Oklahoma has a few ways to pay your unemployment and income taxes.

Online services

Unemployment insurance tax

The Oklahoma Employment Security Commission's EZ Tax Express allows employers to conveniently pay their UI taxes online while providing access to their tax account history and filing status. Payment methods include ACH debit and credit cards.

Oklahoma withholding tax

Employers can use the Oklahoma Tax Commission's OkTap system to pay withholding taxes electronically by creating an account.

By mail

Unemployment insurance tax

The Oklahoma Employment Security Commission recommends you pay your unemployment taxes via EZ Tax Express. Starting October 1, 2024, they will begin charging a processing fee for all checks. 

Oklahoma withholding tax

Employers may also mail their withholding tax payments to the Oklahoma Tax Commission via check or money order. Please make payments payable to the "Oklahoma Tax Commission" and mail them to the following address:

Oklahoma Tax Commission
Post Office Box 26930
Oklahoma City, OK 73126-0930

Late tax payments of 15 or more days incur a 10% penalty on the tax or underpaid amount. The state will also charge an interest of 1.25% per month on any unpaid amount after the due date.

Rippling’s full-service payroll software

Need a simple payment option? Rippling's payroll software is powerful and user-friendly—ideal for businesses in Oklahoma and beyond. Explore the benefits of Rippling’s payroll software for your business, including accurate tax withholding calculations and automatic compliance when filing taxes in any state.

FAQs about Oklahoma payroll taxes

Are there local tax laws in Oklahoma?

No. Oklahoma doesn’t have any local income tax laws. 

Can your tax returns be audited in Oklahoma?

Yes, tax returns can be audited in Oklahoma. The Oklahoma Tax Commission (OTC) can audit tax returns, request supporting documentation for deductions and credits claimed, and assess penalties and interest for underpayments.

Are nonprofit organizations subject to payroll taxes in Oklahoma?

Certain nonprofit organizations in Oklahoma are responsible for withholding and remitting payroll taxes. Nonprofits that meet the requirements for exemption under the Internal Revenue Code (IRC) Section 501(c)(3) aren’t obligated to pay federal unemployment taxes. However, if they decide to participate in Oklahoma's state unemployment insurance program, they can choose their preferred payment method.

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.