Comprehensive Guide to Payroll Taxes in Idaho

To navigate payroll taxes in Idaho, employers need to comply with federal and state tax obligations, regulations, and requirements. This guide provides a detailed and structured overview of Idaho payroll taxes and outlines what employers need to pay and withhold from payroll in Idaho, including unemployment insurance, personal income tax, and workers’ compensation.

Overview of Payroll Taxes in Idaho

Employers in Idaho are responsible for managing several payroll taxes, including federal income tax, FICA taxes (Medicare and Social Security), and state payroll taxes.

Idaho does not have many local tax laws, simplifying the payroll tax process for employers. Plus, the state operates with a flat income tax rate, which makes it relatively straightforward for employers to calculate state income tax withholdings.

The administration of payroll taxes in Idaho is handled by two main bodies: the Idaho State Tax Commission and the Idaho Department of Labor. Employers are required to report new hires or rehired employees within 20 days of their start date.

Unemployment insurance (UI)

UI is a federal and state-run program that requires employers to make contributions to a fund. This fund is used to support workers in Idaho who lost their jobs through no fault of their own.

Idaho employers benefit from some of the lowest UI taxes in the US. Rates in 2025 range from 0.18% to 5.4% on a taxable wage base of $55,300 per employee. The amount you pay is calculated according to your experience rating, in other words, how many unemployment claims former workers make against your business.

New employers pay a fixed standard rate of 1% for their first six quarters. Afterward, they automatically get assigned an experience rating.

UI tax payments are due quarterly, with deadlines on April 30, July 31, October 31, and January 31. If a due date falls on a weekend or holiday, payments are due the next business day.

The Idaho Department of Labor's online portal makes managing UI obligations more efficient and accessible for employers. This includes making payments, filing reports, and viewing your business’ account balance.

For additional guidance and information on paying UI, the Idaho Department of Labor website offers comprehensive resources to keep you informed and compliant.

Withholding personal income tax (PIT)

Another important aspect of state payroll taxes in Idaho is the withholding of personal income tax (PIT). This tax is deducted from your employees' wages and is withheld by the employer. Afterward, you are required to remit the withheld amount to the Idaho State Tax Commission.

The Idaho State Tax Commission can audit state income tax returns and other tax filings to ensure compliance.

Idaho's personal income tax (PIT) is levied on the income of Idaho residents to fund state-run programs. In 2024, Idaho introduced a single-bracket tax system for residents hiring over a set threshold. The rate is 5.695% for individuals earning over $4,673 per month and married couples earning a joint income of over $9,346 per month.

Employers must file and pay taxes at a set frequency:

Note that if you don’t withhold any taxes for one period, you must still file a zero-payment form.

To streamline the process of paying PIT, Idaho's State Tax Commission has introduced a self-service feature. The Commission's website offers valuable information and assistance to help you navigate through the intricacies of PIT withholding in Idaho.

Submitting Payroll Taxes in Idaho

Employers have several options for submitting payroll taxes in Idaho:

- e-Services: Use online portals provided by the Idaho Department of Labor and the Idaho State Tax Commission

- Mail: Send payments to the Idaho State Tax Commission addresses, depending on whether forms are included
- Electronic Funds Transfer (EFT): Use ACH credit with an ACH Credit Addenda and Bank Information form

You must use ACH for any payments exceeding $100,000 under Idaho state law.

Paying Idaho workers' compensation (WC)

Workers' compensation is an essential form of insurance that provides coverage for employees who sustain work-related injuries or illnesses. As an Idaho employer, you are legally obligated to provide workers' compensation coverage, regardless of the size of your workforce. You must also have the insurance in place before you hire your first employee or risk penalties of $2.50 per day per employee.

While paying state payroll taxes is essential, workers' compensation ensures that your employees are protected in the event of work-related accidents or health issues. It is important to secure coverage from a qualified commercial carrier in Idaho. The Idaho Industrial Commission provides additional information to help you identify a suitable carrier, ensuring your compliance with the state's workers' compensation regulations.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Idaho payroll taxes, payroll compliance 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 streamline your US payroll processes and ensure compliance with state regulations.