Rhode Island may be the smallest state in the union, but as one of the original 13 colonies, it’s steeped in the rich history of our great nation. You enjoy being in a small state that packs a big punch. That’s why you started your small business here. But whether you own the best Italian restaurant in Providence or the coolest bar in Newport, there is one thing you and the other 200,000 Rhode Island small business owners definitely don’t enjoy: payroll taxes.
That’s what we’re here for. We designed a handy payroll calculator to ease your payroll tax burden. All you need to do is enter wages earned and W-4 allowances for each of your employees. Our calculator will calculate gross pay, take out deductions, and come up with the net pay you’ll need to write your employees’ paychecks.
First of all, we need to take care of Uncle Sam. You can use our Rhode Island payroll calculator to figure out your employees’ federal withholding as well as any additional taxes you are responsible for paying as the employer.
Here’s a quick overview of what you need to know when you’re calculating federal payroll taxes. If you would like to get into each calculation in detail, check out our step-by-step guide.
However, for salaries above $200,000, employees need to pay what’s called an Additional Medicare Tax. The rate for this additional tax is 0.9%, which makes the total 2.35%. Only the employee is responsible for paying the Additional Medicare Tax, not the employer.
Note that if you pay state unemployment taxes in full and on time, you are eligible for a tax credit of up to 5.4%, making your FUTA tax rate effectively 0.6%. FUTA tax is the sole responsibility of the employer. Your employees are not responsible for paying this tax.
Now that we’re done with federal income taxes, let’s tackle Rhode Island state taxes. The state has a progressive income tax, broken down into three tax brackets, meaning the more money your employees make, the higher the income tax. The rates range from 3.75% to 5.99%.
The tax breakdown can be found on the Rhode Island Department of Revenue website.
Besides the state income tax, The Ocean State has three additional state payroll taxes administered by the Division of Taxation: 1) Unemployment Insurance, 2) Job Development Fund, and 3) Temporary Disability Tax. You’re responsible for paying the first two taxes, while the last tax should be withheld from each employee’s paycheck.
If you’re a new employer (congratulations, by the way!), you pay 1.17%.
Details on all three of these payroll taxes can be found here.
OnPay processes payroll and automates all your tax payments and filings.
You’re almost at the finish line! You’ve checked “payroll taxes” off your to-do list so you can move onto the important things. Once each employee’s net pay is calculated (taking deductions and withholdings into consideration), you’re in the clear.
All you have to worry about is getting your employees paid on time as well as setting aside whatever you owe in FICA and unemployment taxes. Those numbers can add up quickly!
You will need to use Form 941 to file federal taxes quarterly, and Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. More information about employment tax due dates can be found here.
Our calculator is here to help, but of course, you can never learn enough, especially when it comes to payroll taxes. Here are some additional resources and contact information to help you run payroll: