Alaska payroll taxes for employers (2026)

Why Alaska payroll looks simple but is not

No income tax means no withholding tables, no state W-4 and no local tax. What remains has some sharp edges.

Employees pay unemployment tax

You withhold 0.50% from each employee on the first $54,200 and send it with your own share. The employer rate runs from 1.00% to 5.40%, so the combined rate is 1.50% to 5.90%. New construction employers start at the same 1.00% plus 0.50%; the agency lists that rate for every industry except public administration. The base is the fifth highest in our state SUTA table, so the tax applies to most of a typical salary.

The employee picks the pay period

Under AS 23.05.140, pay periods are monthly or semi-monthly at the employee's choice. Build that into your offer letter.

Minimum wage is climbing

Alaska's minimum wage went to $14.00 on July 1, 2026 (it was $13.00 from January 1 to June 30). It reaches $15.00 on July 1, 2027 under AS 23.10.065, then follows CPI from January 1, 2028. There is no tip credit, so tipped staff get the full rate. Compare it in the minimum wage table.

Workers comp has no reciprocity

Any employer with one employee in Alaska needs coverage, including out-of-state companies, because Alaska does not accept other states' policies. The penalty for going uninsured can reach $1,000 per employee per day. Sole proprietors, partners and LLC members or corporate executives with 10% or more ownership do not have to cover themselves.

Final pay in 3 working days

A fired worker is paid within 3 working days. A worker who quits is paid by the next regular payday that is at least 3 working days after the last day worked. We did not record an official source for this rule, so confirm it with the Alaska Wage and Hour section.

Alaska employer payroll facts at a glance

Registering an Alaska payroll

With no income tax, Alaska needs fewer accounts than most states.

1. Get a federal EIN from the IRS.
2. Open an Employment Security Tax account with the Alaska Department of Labor and Workforce Development. Its online employer services portal (tos.dol.alaska.gov) is linked from the agency's tax page; the page does not say outright that new employers register there, so call the agency if you cannot find a registration option.
3. Report new hires and rehires to the Alaska Child Support Services Division within 20 days.
4. Buy an Alaska workers comp policy before the first person starts. An out-of-state policy does not cover Alaska work.

Remote-first companies adding one Alaska hire should read our payroll compliance checklist for the multi-state side.

Alaska employee cost: a $50,000 example

Because the UI base is above $50,000, the whole salary is taxed for unemployment.

You pay $4,367, 8.73% above salary. The employee has $250 withheld for UI (0.50% x $50,000) plus Social Security and Medicare, and no state income tax. A worker earning $54,200 or more pays the UI cap of $271. Your rate after the new employer period depends on your claims history, up to 5.40%.

Payroll services and PEOs for Alaska

Few states tax employees for unemployment, so in Alaska confirm the system withholds the 0.50% employee UI share and stops at $54,200. Gusto lists $49 a month plus $6 per person on its Simple plan, and $80 plus $12 on Plus if you also pay people in other states (checked October 16, 2026). See ranked payroll software and payroll pricing compared.

Alaska does not license PEOs, according to Harbor Compliance's private state guide. Your Alaska staff still need Alaska workers comp coverage, whoever arranges it. Compare options in the PEO rankings.