3 min read

Your Ultimate Guide to Virginia Payroll

US Payroll


Jemima Owen-Jones


August 07, 2023

Last Update

June 28, 2024

Table of Contents

Paying unemployment insurance

Withholding personal income tax from your Virginia employee

Paying your Virginia workers’ compensation

Simplify US payroll tax compliance with Deel

Key takeaways
  1. Employers must pay unemployment insurance in the state of Virginia.
  2. Personal income tax must be deducted from the employee’s wages and withheld by the employer.
  3. Virginia employers must pay for workers’ compensation, even if they only have one Virginia employee.

Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. This guide explains what employers must pay and withhold from payroll in Virginia, including unemployment insurance, personal income tax, and 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 Virginia 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 Virginia unemployment insurance through the online portal. Refer to the Virginia Employment Commission for more information on paying your unemployment insurance. 

Withholding personal income tax from your Virginia 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 Virginia 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 file and pay the withholding amount online. For more information on paying the withholding amount, refer to the Virginia Department of Taxation.

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Paying your Virginia workers’ compensation

In addition to paying Virginia payroll taxes, employers need to pay for workers’ compensation, even if they only have one Virginia employee. 

Workers’ compensation is a type of insurance that covers wages and medical benefits for employees who are injured while performing their job. The state of Virginia provides information online to help you find a qualified commercial carrier. Employers should verify 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 Virginia 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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