US State Tax Michigan

Your Ultimate Guide to US Payroll in Michigan

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

Stefana Zaric
Written by Stefana Zaric
August 7, 2023

Key takeaways

  1. If you have employees in Michigan, one of the taxes that you will need to pay is Unemployment Insurance.
  2. Employers must also withhold Personal Income Tax, also known as individual income tax or state income tax, on the wages of Michigan residents.
  3. You must pay for workers’ compensation even if you only have one Michigan employee.

When hiring in Michigan, you must understand state payroll taxes to ensure full compliance. In addition to federal taxes such as Medicare and Social Security, employers are responsible for withholding and paying certain Michigan state taxes from their employees' payroll. This article provides an overview of Michigan payroll tax regulations.

Paying unemployment insurance

Unemployment Insurance (UI) is a nationwide program administered by the U.S. Department of Labor. This program provides temporary payments to workers who are unemployed through no fault of their own.

As an employer, you are obligated to pay UI on behalf of your employees. You can conveniently register and manage your Michigan unemployment insurance through the state's online portal.

For more information on paying this state tax and meeting specific obligations, refer to the Michigan Department of Labor and Economic Opportunity's resources for employers.

Withholding personal income tax from your Michigan employee 

In addition to federal taxes, employers in Michigan are responsible for withholding Personal Income Tax (PIT) from their employees' wages. PIT is also known as individual income tax or state income tax, and every employer with workers in Michigan is required to withhold it from employees' wages.

Subsequently, you are required to remit the withheld amount to the state. Conveniently, Michigan provides an online portal for employers to pay the withheld amount. For detailed guidance on paying the withholding amount, consult the Michigan Department of Treasury's resources on withholding taxes for employees.

Paying your Michigan workers’ compensation 

Apart from paying Michigan payroll taxes, employers must also provide Workers' Compensation (WC) coverage for their employees.

Regardless of the number of employees, workers' compensation insurance is crucial, as it offers protection to employees in the event of job-related injuries or illnesses. To find a qualified commercial carrier that meets the state's requirements, refer to the information provided by the Michigan Department of Labor and Economic Opportunity.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Michigan 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.

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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