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

Tax responsibilities are an inescapable reality for businesses. And for employers in Wisconsin, it's no different. In addition to paying FICA taxes to the IRS, which cover medicare tax and Social Security tax, you also need to pay state-specific payroll taxes. Since tax regulations vary from state to state, it’s crucial to understand these laws everywhere your employees live and work to avoid penalties for late or incorrect filings.

Unlike the simple flat-rate income tax system in some states, Wisconsin has a progressive income tax system. This means the more money your employees make, the more taxes they’ll pay. And the more workers you hire, the more you’ll have to withhold from your Wisconsin employees’ paychecks. 

In this guide, we'll break down everything you need to know about payroll taxes in Wisconsin, including your tax responsibilities, due dates, and how to submit payroll taxes. Whether you run a small business or a large corporation in the Badger State, this guide has you covered. 

The 2 Wisconsin payroll taxes

Wisconsin has two types of payroll taxes: personal income tax (also known as withholding tax) and unemployment insurance (UI) tax. The Wisconsin Department of Revenue (DOR) administers personal income taxes (PIT) at the state level, and the Wisconsin Department of Workforce Development administers the state’s UI taxes.

Your payroll tax obligations start within 20 days of an employee’s start date, during which you must report new hires to the Wisconsin New Hire Reporting Center either electronically or by mail.

Next, let’s get into the details of these two types of payroll taxes. 

Personal income insurance tax 

Personal income tax funds public services in Wisconsin, like schools, healthcare, roads, and other important resources. As a Wisconsin employer, you must withhold income taxes from employees who live in Wisconsin and from non-residents for work done in Wisconsin. However, there are some exceptions. For example, Wisconsin has reciprocity with Indiana, Illinois, Kentucky, and Michigan—meaning employees from these states are taxed on income earned from their home state rather than Wisconsin. 

Wisconsin has a graduated income tax rate, meaning individual income tax rates vary from 3.5% to 7.65%, depending upon marital status and income.

To figure out how much to withhold for Wisconsin personal income tax, you can choose between two DOR-approved methods:

1. Use the paycheck calculator tables in the DOR Withholding Tax Guide (starting on page 27).
2. Follow the calculations on pages 25-26 of the same guide. 

If you want to use a different calculation method, you’ll need permission from the DOR before the beginning of the pay period for which you need to withhold taxes. 

Staying on top of payroll tax laws in Wisconsin can quickly become overwhelming, especially with the state’s progressive tax system. Fortunately, Rippling’s payroll software makes your life easier. Rippling automatically calculates your taxes and submits your tax forms and payments to ensure total compliance with federal, state, and local laws. Rippling’s PEO can even register and maintain your state tax accounts to further automate the process. 

Unemployment insurance tax

The Wisconsin Unemployment Insurance program offers temporary financial assistance to people who are unemployed due to circumstances beyond their control, like layoffs. Eligible unemployed workers get weekly benefits, which are financed solely through employer contributions.

New employers have a fixed state unemployment insurance (SUI) tax rate for the first three calendar years of payroll. After that, the DWD will give you a new tax rate based on your account experience. 

These are the 2024 new employer tax rates, but keep in mind the rates can change from year to year:

• If you have less than $500,000 in payroll, you’ll pay 3.05%. If your payroll is above $500,000, you’ll pay 3.25%. 
• If you’re in the construction industry and your payroll is less than $500,000, you’ll pay 2.90%. If your payroll is above $500,000, you’ll pay 3.10%. 

You’ll also need to post a poster in your workplace about unemployment insurance, which you can find on the DWD website.

On top of state UI tax, Wisconsin employers also typically need to pay a federal unemployment tax under the Federal Unemployment Tax Act (FUTA).

Payroll tax due dates in Wisconsin

Personal income tax and unemployment insurance tax in Wisconsin have different due dates. 

For PIT, the due dates depend on your filing status, as assigned to you by the DOR:

If needed, you can apply for an extension to file, but you must send your extension request by the original due date of the deposit report or return. You can make the request in My Tax Account or via email or mail.

For unemployment insurance, Wisconsin employers owe tax to the DWD 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

How to submit payroll taxes in Wisconsin

You now know the types of payroll taxes in Wisconsin and when to pay them—but how do you actually file taxes? 

Before you can submit payroll taxes, you’ll first need to register with the DOR for a Wisconsin withholding tax account number, either online via My Tax Account or by completing an Application for Business Registration. Registration will cost you $20, and your number will be valid for two years. After that, you’ll need to pay a $10 renewal fee. 

You’ll also need to collect tax forms from your employees: a W-4 form for their federal income tax and a WT-4 for their Wisconsin income tax. 

Once you’re ready to file, you have a few options. 

Submit online 

The DOR offers a few free online methods for employers to submit their withholding taxes. 

The Wisconsin My Tax Account online portal

One of the most convenient ways to submit payroll taxes in Wisconsin is through the Wisconsin DOR’s My Tax Account online portal. You can log in, enter your tax information, and file and pay state income tax withholdings, unemployment insurance tax, and other related taxes quickly and securely. 

The benefits of paying payroll taxes online include:

• Make payments automatically
• Save your banking information for later use
• Schedule and cancel future payments
• Save time and money on postage and mailing checks
• Eliminate the risk of your payments being lost in the mail
• Easily track your previous payments
• Ensure security and confidentiality for all transactions

Wisconsin is a "piggyback" state, meaning Wisconsin's electronic filing program works with the federal electronic filing program. If you file online, you typically file both your state and federal income tax returns together.

Wisconsin e-file

You can also pay withholding taxes through DOR's Wisconsin e-file system. Before you submit your return, you need to choose how you’ll pay: via direct debit/withdrawal, online by credit/debit card or Apple Pay, by check, or by money order.

Electronic funds transfer (EFT)

Electronic funds transfer is another electronic payment option for payroll taxes in Wisconsin. You can set up an EFT account through the DOR to transfer funds from your financial institution.

Wisconsin Tax and Wage Reporting System

If you have 25 or more employees in a quarter, you need to file your UI reports electronically through the Wisconsin Tax and Wage Reporting System. 

File by mail 

Some smaller businesses may choose to file paper forms, but keep in mind the DOR encourages electronic filing. This method may also be more time-consuming and less efficient compared to online filing.

To file by mail, first get the necessary tax forms from the DOR’s website, fill them out manually, and mail them along with a check for the tax amount owed to the following address:

Wisconsin Department of Revenue
PO Box 8920
Madison WI 53708-8920

Rippling’s full-service payroll software

If you're looking for an even simpler way to handle your payments, Rippling's payroll software might be your new best friend—the software is so powerful that it practically runs itself. Rippling takes care of all the nitty-gritty compliance work and files your federal, Wisconsin state, and local payroll taxes correctly and on time.

FAQs about Wisconsin payroll taxes

Are there local tax laws in Wisconsin?

Yes, Wisconsin has local tax laws in the form of local sales taxes. Depending on the location, the total sales tax can go up to 5.6%. Additionally, Milwaukee has a Local Exposition District called the "Wisconsin Center Tax District” and imposes certain taxes to fund exposition center facilities.

Otherwise, Wisconsin doesn’t have any local income taxes at the city or county level. 

Can your tax returns be audited in Wisconsin?

Yes, like in any state, your tax returns can be audited in Wisconsin—the Wisconsin Department of Revenue conducts audits to verify the accuracy of tax returns. It's crucial to maintain accurate records and ensure compliance with state tax laws to avoid any potential issues. 

Are nonprofit organizations subject to payroll taxes in Wisconsin?

Nonprofit organizations in Wisconsin are generally subject to the same rules as other employers when it comes to paying payroll taxes. However, nonprofit organizations with an IRS Code 501(c)(3) status can go for reimbursement UI financing, meaning they can opt out of the tax system and only reimburse the state for the unemployment claims their former employees use. 

Do employers need workers’ compensation in Wisconsin?

Yes, Wisconsin employers with at least one employee (part-time or full-time) are required to provide workers' compensation insurance. This insurance provides coverage for employees who are injured on the job.

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.