Central Payroll Bureau

You’ll then withhold that local tax amount from the employee’s paycheck as well. They’ll also need to know which specific counties your employees live and work in for local tax purposes. For those using online software, your year-to-date payroll data can often be uploaded using XLS or CSV file format, making the transition easy. Payroll providers like Gusto provide state-compliant payroll and can file Maryland payroll taxes on your behalf.

If you have more than 15 employees, you must also include how much sick time/paid time off the employee has earned and used. Time and attendance software like Homebase can be a lifesaver when managing overtime, breaks, and leave balances in Maryland.

Payroll Officers

To save time from entering employee work hours, consider using free time and attendance software like Homebase that uploads hours worked into Gusto each pay period. In addition, your payroll provider will need to know if anyone was promoted or received a pay rate change so that they can update that employee’s status and pay rate. Maryland allows you to pay employees weekly, biweekly or semimonthly. In fact, direct deposit is allowed in Maryland only if the employee authorizes it; a Maryland employer cannot require an employee to use direct deposit. Further, if a payday falls on a holiday, you’re required to pay the employees on the last business day prior to that holiday date.

Maryland requires small businesses, ranging from one to 14 employees, to provide their workers with unpaid sick leave. Paid sick leave is required if you employ more than 15 workers. Sick leave of 40 hours can be granted at the start of each year, or employers can set up an accrual system that awards employees with one hour of sick leave for every 30 hours worked. Refer to our article on sick leave for a free downloadable policy template. The payroll office is a part of the department of financial services at Loyola University Maryland.

To complicate the rules further, employers in Montgomery who have 51 or more employees have to pay a minimum wage of $12.25 an hour. Once an employee is in the payroll system (it can take new employees 2-3 pay periods to be “in the system”), it will take 2 more pay periods for direct deposit to begin. A “pre-note” is done which is a test of the bank routing and account number. If the bank does not reject the pre-note, the direct deposit will begin next pay period. Generally, employers covered by Maryland’s wage payment law must pay wages no less frequently than biweekly or semimonthly. Paydays can be less frequent for executive, administrative, or professional employees.

On it, employees list their full name, address, Social Security number, county of residence, filing status and exemption information. Individuals who are considered qualified spouses of military and those who are receiving annuity, sick pay or retirement distributions may need to complete separate withholding forms. Maryland’s payroll and employment laws are some of the most stringent in the country. The state charges income tax, has a minimum wage rate that’s higher than the federal government and has laws governing shift breaks, leave and equal pay. Many small businesses find the nuances of state laws difficult to track.

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You’d also mark the last day worked for any employee who was terminated during the payroll cycle. Of course, using timekeeping software like Homebase time and attendance data could be interfaced into payroll software, which includes hours taken for vacation or sick time off. Your payroll run would then process all that data into net pay amounts for each employee.

Overtime is calculated the same in Maryland as in most states in the United States. After 40 hours of work within one week, the employee is paid overtime at a rate that’s 1.5 times their regular pay rate. However, Maryland provides some overtime exemptions, such as for administrative employees and seasonal workers. For employers who pay employees in Maryland, use this guide to learn what’s required to start running payroll while keeping compliant with state payroll tax regulations. Without this information, OnPay will be unable to file or deposit any Maryland tax payments for your company. Any penalties and interest that accrue from missed tax payments will be your company’s responsibility. Plus, employees also have to take local income taxes into consideration.

Homebase is easy to set up and use, has a mobile app, and offers communication tools to keep you informed of changes. It allows you to pre-approve time off requests and track sick leave, and it interfaces with popular small business payroll software. Maryland’s minimum wage is $10.10 per hour, which is higher than the federal minimum wage. In addition, employers in Montgomery and Prince George counties pay an even higher minimum wage ― $12 and $11.50, respectively.

When calculating overtime, only count the hours actually worked and not leave hours, such as vacation, sick time, holiday, etc. Some payroll services, such as ADP TotalSource will process your employee payroll based on each employee’s salary or hours worked. Using payroll software like Gusto, you’d key in work hours manually, add bonuses, and input new hire data yourself.

Each county in Maryland charges a different rate, and they range from 2.5% to 3.2%. All employers in Maryland must allow employees time off to vote if they do not have sufficient time to vote before or after work. Employers must grant employees two hours of paid leave to vote unless employees have two continuous off-duty hours while the polls are open.

What Must Be Printed On An Employees Pay Stub In Maryland?

That’s why some use affordable online payroll software like Gusto. It provides new hire reporting and tax filing in compliance with state laws and can even offer consulting services if you have questions about Maryland payroll taxes. You can give them cash ― not recommended ― provide them a check with a pay stub, which is required in Maryland, or pay them with direct deposit if you’ve received their approval in advance. For example, if you were working with Gusto, you’d print out the paychecks yourself using bank-approved check stock . Whereas with ADP, they’ll print checks and mail them for you. Both vendors can provide direct deposit and pay card options too. Payroll software like Gusto makes inputting these changes easy as part of your payroll process.

• Maryland expects employers to withhold state taxes ― in addition to federal income tax withholdings ― for their employees.
• In addition, 24 counties in Maryland have local tax rates as well; those range from .0175% and 3.2%.
• In addition, they require pay stubs be provided and mandate equal pay for equal work across all employers, regardless of size.
• Maryland is stricter than other states which may defer to federal minimums ― specifically when it comes to minimum wage, break times, and employee leave.
• State taxes range from 2% and 5.75%, depending on the earner’s income and filing status.

Maryland expects employers to withhold state taxes ― in addition to federal income tax withholdings ― for their employees. State taxes range from 2% and 5.75%, depending on the earner’s income and filing status. In addition, 24 counties in Maryland have local tax rates as well; those range from .0175% and 3.2%. Maryland is stricter than other states which may defer to federal minimums ― specifically when it comes to minimum wage, break times, and employee leave. In addition, they require pay stubs be provided and mandate equal pay for equal work across all employers, regardless of size. It may be helpful to view the examples below showing how payroll in Maryland is stricter than the federal government.

Maryland’s tax withholding tables can be found on the state’s government website. If you’re using payroll software like Gusto, these tax withholding rates are typically programmed into the software. To provide accurate, timely, efficient, and customer friendly payroll services to all State of Maryland employees in a secured environment. Provide competent and friendly support services related to administration of voluntary and mandatory payroll deductions, subsidies and taxes. Maryland employers who are leery of making payroll or tax mistakes might find working with a professional employer organization to be a better solution than managing payroll themselves. An established PEO like ADP TotalSource provides HR and payroll consulting, and partners with your business to ensure compliance with all federal, state, and local laws and tax rules.

Maryland requires employers to withhold state income tax from employees’ wages and remit the amounts withheld to the Comptroller of Division of Revenue. Wage deductions that are permissible in Maryland include court-ordered garnishments and federal, state and local taxes. Most other deductions require written authorization from the employee. If any non-exempt employees work more than 40 hours in a workweek, they may be entitled to overtime pay that’s 1.5 times their regularly hourly wage. The state requires you to post the applicable rate information.

Payroll Resources

Gusto can save you the trouble of keeping track of when labor laws change while letting employees view their pay stubs online. Gusto can help you set up and manage your payroll cycles, track paid and unpaid sick leave and provide year-end W2 and 1099 tax reporting. Maryland provides a payment system called WebTax to make it easy for businesses who hire workers to pay their Maryland payroll taxes.

Some of these differences come into play based on how many employees you have. In Maryland, you must provide company information, along with information about employees and their earnings ― their pay rate and how they are paid, such as hourly or salaried. You should also include the employees’ hours worked as well as the pay period start and end dates. In addition, you’ll list any payroll deductions taken, such as for health insurance. If you have more than 15 employees, you must also show their leave balances, including leave accrued and taken.

We are responsible for paying more than 3,500 employees, including all of our students, faculty, administrators, and staff. The mission of this office is to ensure that all employees are paid in a timely and accurate manner, while meeting all regulatory and compliance requirements. Our staff is committed to upholding the Jesuit ideals of this institution and to provide excellent service to our community, while focusing on future process and service improvements. The Employee’s Maryland Withholding Exemption Certificate, also known as Maryland Form MW507, is used to determine how much income tax to deduct from employee wages.

They require businesses to pay Maryland unemployment insurance as a tax liability, with a rate that ranges between 0.3 and 7.5%, based on your business’ unemployment experience. In addition, Maryland exempts Social Security retirement benefits from being taxed. Multistate employers and those who employ workers in Maryland may wish to use affordable payroll software like Gusto to ensure that they’re in compliance with state and local labor and tax laws. Gusto is easy to set up and use, provides employee self-service and is compliant with state and federal law. Further, Maryland requires employers to pay an unemployment insurance tax that ranges between 0.3% and 7.5%, depending on experience.

You do this each pay period before you “run payroll” and process employee net pay onto a check. Payroll software typically allows you to view your numbers ― like total earnings and deductions ― before you finalize each payroll run. Verify your calculations to make sure they appear to be in line. Payroll providers will require two sets of data to set up your payroll processing in Maryland. The first set of data is about your company and employees, such as your company name, information on your employees, and suggested payroll timeframes. Then, each payroll cycle they’ll need you to provide employee work hours and any changes like new hires, promotions, and terms. Maryland requires the pay stub to include basic information about your company as well as information on earnings, pay rate, deductions, and hours worked.