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Your Ultimate Guide to US Payroll in Alaska

Managing payroll in Alaska? Read our state-by-state guide to US payroll taxes to learn what you must withhold and deduct from employee wages.

Shannon Hodgen
Written by Shannon Hodgen
July 24, 2023
Contents
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Key takeaways

  1. Employers are responsible for paying payroll taxes and remaining compliant with state-specific regulations.
  2. In Alaska, employers must pay unemployment insurance and workers’ compensation and withhold federal taxes on behalf of employees.
  3. Deel makes it easy to remain compliant while hiring a dispersed team across various states, ensuring your business meets all requirements.

Employers have to navigate a variety of regulations and requirements to ensure proper payroll withholding in each US state. This guide serves as an introduction to what employers need to pay and withhold from payroll in Alaska, including unemployment insurance, personal income tax, and workers’ compensation. 

Paying unemployment insurance 

Unemployment insurance, also known as UI, provides financial assistance to eligible individuals who have lost their jobs through no fault of their own. The settlement helps them bridge the gap between periods of unemployment. 

Both the employer and the employee contribute to unemployment insurance premiums in Alaska. Deductions for UI are shown in a statement, alongside other deductions made from an employee’s wages. 

Other federal taxes withheld from wages include Medicare and Social Security. Together, these taxes are known as employer payroll taxes or payroll withholding, and they help to fund various government programs and benefits. 

The US Department of Labor administers unemployment insurance, and employers in Alaska can manage their payments through the Alaska Department of Labor and Workforce Development. For more information on paying your unemployment insurance, see the Alaska government website

Withholding personal income tax from your Alaska employee 

Unlike most other states, Alaska does not impose a state income tax on its residents, meaning it is one of the few states that does not have an individual income tax. 

However, Alaska employees may still be liable to pay federal income tax as mandated by the Internal Revenue Service (IRS). The employer withholds federal income tax on behalf of the employee, ensuring that the employees meet the necessary tax obligations throughout the year. Employers in Alaska must stay updated with changes in federal tax laws and regulations, ensuring compliance with tax obligations. 

For more information on paying taxes in Alaska, visit the State Department of Commerce, Community, and Economic Development

Paying your Alaska workers’ compensation

As an employer in Alaska, you are responsible for paying workers’ compensation to protect both your business and the employees. Workers’ compensation provides coverage for employees who suffer work-related injuries or illnesses, offering medical benefits and wage replacement during their recovery period. 

Employers are required to carry workers’ compensation insurance, even if you only hire one employee in Alaska. Selecting a reputable insurance provider and accurately reporting employee wages is essential to ensure proper coverage and compliance with state law. Alaska’s Department of Labor and Workforce Development offers more information on workers’ compensation requirements for employers online.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Alaska payroll taxes, federal and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel.

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can simplify your US payroll processes and ensure compliance with state regulations.

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.

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