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Your Ultimate Guide to Rhode Island Payroll

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

Jemima Owen-Jones
Written by Jemima Owen-Jones
July 31, 2023

Key takeaways

  1. Employers must withhold and pay unemployment insurance, personal income tax, and temporary disability insurance in Rhode Island state.
  2. Employers must pay job development fund tax with no employee contributions.
  3. Rhode Island employers must pay for workers’ compensation even if they only have one Rhode Island employee.

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide introduces what employers must pay and withhold from payroll in Rhode Island, including the following:

  • Unemployment insurance
  • Personal income tax
  • Job development fund tax
  • Temporary disability insurance
  • Workers’ compensation

Paying unemployment insurance 

On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain Rhode Island state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding. One of the taxes you must pay is unemployment insurance (UI). 

Unemployment insurance 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. You can manage your Rhode Island unemployment insurance through the online portal.

Refer to the Rhode Island Department of Labor for more information on paying your unemployment insurance.

Withholding personal income tax from your Rhode Island employee 

Employers are also responsible for withholding personal income tax from their employee’s payroll. Personal income tax, also known as individual income tax or state income tax, is a tax on the income of Rhode Island residents. Employers must withhold the tax from the employee’s wages.

After you withhold the tax from your employee, you are responsible for paying the amount you withheld to the state. You can file and pay the withholding amount online.

For more information on paying the withholding amount, refer to the Rhode Island Department of Revenue.

Paying the job development fund tax in Rhode Island

Employers must pay job development fund Tax in Rhode Island. This tax assists Rhode Island employers by funding a variety of projects designed to improve and upgrade the skills of the existing workforce. The employer pays this tax and does not have any employee contributions. You can file and pay your job development fund tax through the online portal.

Withholding temporary disability insurance from your Rhode Island employee 

Unlike workers’ compensation, where the insurance for an employee’s injury while performing their job, temporary disability insurance (TDI) provides temporary benefit payments to workers for non-work-related illness, injury, or pregnancy. 

Payroll withholdings fund TDI. The employer’s responsible for withholding and paying the amount to the state. You can file and pay this withholding amount online.

Paying your Rhode Island workers’ compensation 

On top of paying your Rhode Island payroll taxes, you will also need to pay for workers’ compensation in the state. You must pay for workers’ compensation even if you only have one Rhode Island employee. 

Workers’ compensation is insurance for an employee’s injury while performing their job. Employers typically purchase workers’ compensation from a qualified commercial carrier in the state. Rhode Island State provides information online to help you find a qualified commercial carrier. Employers should verify that their workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Simplify US payroll tax compliance with Deel

While this guide provides essential information on Rhode Island 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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