Easily manage employment in North Dakota

Payroll management in North Dakota

North Dakota has a strong economy supported by industries such as energy, agriculture, manufacturing, and healthcare. With state-specific payroll regulations, including a low minimum wage, a flat state income tax, and right-to-work laws, employers in North Dakota must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in North Dakota

Employers in North Dakota must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: North Dakota follows the federal minimum wage of $7.25 per hour, as the state does not have a higher minimum wage requirement.
• Overtime rules:
• North Dakota follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• North Dakota has a flat state income tax rate of 1.5% as of 2024, one of the lowest in the country.
• Employers must withhold state income tax and remit it to the North Dakota Office of State Tax Commissioner.

Unemployment insurance (UI) tax

• Employers must contribute to North Dakota’s Unemployment Insurance (UI) program, managed by the Job Service North Dakota.
• The UI wage base in North Dakota is $40,800.
• UI tax rates vary based on an employer’s experience rating and range from 0.08% to 9.69%.
• New employers typically pay a 1.0% UI tax rate.

Workers’ compensation

• North Dakota law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Workers’ compensation insurance is provided exclusively by Workforce Safety & Insurance (WSI), the state’s monopolistic workers’ compensation provider.

Payroll tax filing and payment deadlines

• Employers must register for a North Dakota Withholding Tax Account with the North Dakota Office of State Tax Commissioner.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to Job Service North Dakota.
• Payroll tax payments can be made electronically through the North Dakota Taxpayer Access Point (ND TAP).

Quick facts: Important considerations for employers

• State minimum wage compliance: North Dakota follows the federal minimum wage of $7.25 per hour.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck on the next scheduled payday.
• If an employee resigns, the final paycheck must be provided by the next scheduled payday.
• New hire reporting: Employers must report new hires to the North Dakota State Directory of New Hires within 20 days.
• Paid sick leave: North Dakota does not require employers to provide paid sick leave, but employers may choose to offer it as a benefit.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: North Dakota is a right-to-work state, meaning employees cannot be required to join a union as a condition of employment.

Run payroll in North Dakota with Remote

Managing payroll in North Dakota requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.