Comprehensive Guide to Payroll Taxes in Nevada

Employers must navigate complex regulations and requirements to ensure proper payroll withholding in each US state. On top of withholding and remitting or paying federal taxes such as Federal Unemployment Tax, Federal Income Tax, and Medicare and Social Security taxes, you're responsible for paying state payroll taxes and making contributions on your employees' behalf. In Nevada includes State Unemployment Insurance, Modified Business Tax (MBT), and Workers' Compensation Insurance.

This comprehesive guide outlines payroll requirements for employers in Nevada.

Personal Income Taxes

Nevada doesn't levy individual state or local income taxes on its employees. This means that the only personal income tax that employers in Nevada are only required to withhold and remit is Federal Income Tax.

State Unemployment Insurance (SUI)

State Unemployment Insurance (SUI) provides temporary financial support for eligible workers who are unemployed through no fault of their own. In Nevada, employers who have paid $225 or more in wages during a calendar quarter must register and pay SUI tax quarterly to the Employment Security Division.

The SUI rate is calculated based on an employee's wages, up to a taxable annual wage base. The taxable wage base for calendar year 2024 is $40,600, rising to $41,800 in 2025. Nevada employers must pay taxes of $10,000 or more electronically by either ACH Credit or ACH Debit, using the state's Electronic Payment System.

New employers in Nevada pay 2.95% SUI. Once you are eligible for an experience rating, you'll be allocated a tax rate between 0.25% and 5.40% of taxable wages. You'll be charged an extra 0.05% of taxable wages for the Career Enhancement Program (CEP).

The Nevada Revised Statute 612.025 also allows an alternate base period for determining entitlement to unemployment insurance benefits. You can find out more about SUI requirements on Nevada's Unemployment Insurance website

Modified Business Tax (MBT)

Employers in Nevada are required to pay the state's Modified Business Tax (MBT) to the Department of Taxation, and must file a tax return regardless of tax due.

MBT is levied on the employee's total gross wages less employee health care employer-funded benefits. The tax for each calendar quarter must be paid by the last day of the month following the quarter. You can submit your MBT return online through the Nevada Tax Center. The following rates apply:

• Most General Business employers pay MBT at 1.17%, and the first $50,000 of gross wages is non-taxable
• Financial Institutions must pay Financial Institution Modified Business Tax at 1.554% on wages after health benefit deductions. No wage exemptions apply
• Nonprofit organizations, Indian tribes, political subdivisions, and employers of only domestic employees are exempt from MBT

Workers’ Compensation Insurance

Nevada employers with at least one employee are required to supply Workers’ Compensation coverage for their employees in the state. Workers’ Compensation provides financial support for employees who are injured or become ill while performing their job. The employer-funded program also provides legal protection for employees and employers.

Businesses can purchase workers’ compensation from a qualified commercial carrier in the state. Nevada’s Department of Business & Industry Industrial Relations provides various resources to help you find a commercial carrier. If you want to be self-insured, picking a state-approved carrier ensures that your workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Employers who don't obtain and maintain a workers’ compensation policy for their employees may face an administrative fine of up to $15,000. They may incur a premium penalty for the period during which they were uninsured, and the employer will be held financially liable for all costs associated with any uninsured claims. The employer may also face criminal prosecution by the Attorney General’s Office.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Nevada 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.