US State Tax Summeries-2

Your Ultimate Guide to US Payroll in Nebraska

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

Gabriele Culot
Written by Gabriele Culot
July 26, 2023
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Key takeaways

  1. Companies with employees in Nebraska will have to contribute to Nebraska’s state unemployment insurance.
  2. You’ll have to withhold state personal income taxes for employees working in Nebraska.
  3. When you hire one employee in Nebraska, you’ll need to start paying for workers’ compensation insurance in Nebraska.

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain Nebraska state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. 

This guide introduces what employers need to pay and withhold from payroll in Nebraska, including unemployment insurance, personal income tax, and workers’ compensation. 

Paying Unemployment Insurance 

Unemployment Insurance (UI) is a national program administered by the US Department of Labor and provides temporary payments to people who are unemployed through no fault of their own. Although UI is a joint state-federal program to help unemployed individuals, employers in Nebraska must contribute to state unemployment insurance. 

You can manage your Nebraska unemployment insurance through an easy-to-use online portal. For more information on paying your unemployment insurance, the Nebraska Department of Labor provides multiple resources, including instructional guides, rate breakdowns, and more.

Withholding Personal Income Tax from your Nebraska Employee 

Personal Income Tax, also known as individual income tax or state income tax, is a tax on the income of Nebraska residents. The tax is deducted from the employee’s wages and is withheld by the employer. After you withhold the tax from your employee, you are responsible for paying the amount you withheld to the state. You can pay the withheld amount through Nebraska’s online portal

For more information on paying the withholding amount, the Nebraska Department of Revenue provides various resources for businesses. 

Paying your Nebraska Workers’ Compensation 

On top of paying your Nebraska payroll taxes, you will also need to pay for workers’ compensation in the state. Workers’ compensation is insurance to provide care for an employee who gets injured while performing their job. Employers are required to pay for workers’ compensation in Nebraska even if you only have one employee living there.

Workers’ compensation is typically purchased from a qualified commercial carrier in the state. The Nebraska Department of Insurance provides additional information to help you find a qualified commercial carrier. 

Please be sure that you verify that your workers’ compensation insurance is compliant with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Nebraska 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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