Vermont payroll taxes for employers (2026)

The Vermont rules a payroll system has to know

Child Care Contribution

Mandatory since July 1, 2024 and run by the Vermont Department of Taxes, the contribution is 0.44% of wages. You pay at least 0.33% and may withhold up to 0.11% from employees. It is reported quarterly on Form WHT-436 together with income tax withholding, so it does not need a separate filing schedule. Vermont's Family and Medical Leave Insurance (FMLI) is voluntary for private employers and carries no mandatory payroll tax; we did not confirm its voluntary premium rates.

Weekly pay unless you give notice

21 V.S.A. 342(a) makes weekly pay the default. You may switch to biweekly or semimonthly after giving employees notice. A worker you fire is owed final wages within 72 hours; one who quits is paid on the last regular payday, or the following Friday if there is no regular payday (21 V.S.A. 342(b)). See how pay schedules compare before you pick one.

A 10-day new hire deadline

The federal maximum is 20 days. Vermont wants a report within 10 days of the first day the person works for pay, per Department of Labor guide C-61.

Five income tax brackets

The 2026 single annual brackets in Department of Taxes guide GB-1210 (December 22, 2025) are 0% up to $3,925, 3.35% up to $54,675, 6.60% up to $126,775, 7.60% up to $260,225 and 8.75% above. For bonuses and other nonperiodic payments there is no flat supplemental rate; you may estimate withholding at 30% of the federal amount.

• Higher pay floor: $14.42 an hour for employers of 2 or more, and a $7.21 cash wage for tipped workers (those who earn more than $120 a month in tips). We could not confirm a 2027 figure.
• Unemployment rates: 0.4% to 5.4% on the DOL table, on a July 1 to June 30 rate year. We could not read the Department of Labor's own rate page, and found no separate construction rate.
• Workers comp: 21 V.S.A. 687 requires coverage through insurance, guarantee insurance, approved self-insurance or a self-insurance group. The page we read did not state an employee threshold. The market is private.

Vermont employer payroll facts at a glance

Registering a Vermont employer

1. Get a federal EIN.
2. Set up an unemployment insurance account with the Vermont Department of Labor through its Employer/TPA online system (labor.vermont.gov, employer online services). The page does not describe new-employer steps, so contact the department if no registration option appears.
3. Register for withholding with the Vermont Department of Taxes. The same quarterly WHT-436 return carries the Child Care Contribution.
4. Report new hires within 10 days.
5. Put workers comp coverage in place before work begins.
6. Pay weekly, or notify employees before moving to biweekly or semimonthly pay.

Vermont payroll calculator: the $50,000 example

This example assumes you pay the 0.33% employer minimum of the Child Care Contribution and withhold the other 0.11% from the employee.

If you choose to pay the full 0.44% yourself, the contribution is $220.00 and the total $4,241.00. The employee side shows $3,825.00 of FICA, up to $55.00 of Child Care Contribution (0.11% x $50,000) and Vermont income tax under the GB-1210 tables. Because the Department of Taxes states no wage cap for the contribution, it grows with every raise, unlike SUTA. Run other salaries below, or compare the $15,400 base on the 2026 SUTA list.

Payroll and PEO options for Vermont businesses

Ask a provider three Vermont questions before switching: does it calculate and split the Child Care Contribution on WHT-436, does it default to weekly pay, and will it file new hire reports inside 10 days? Restaurants also need the $7.21 tipped wage set correctly; our restaurant payroll guide covers tip credits.

Compare providers on the payroll software rankings and payroll pricing pages, or see the PEO rankings if you want benefits and workers comp bundled. For staff who work across the border, see New Hampshire, New York and Massachusetts, and the minimum wage table for every state's floor.