How to Do Payroll in Vermont: Step-by-Step Guide

Last reviewed: July 2026

Vermont has its own withholding certificate, its own weekly-pay default, and a UI rate year that runs on a different calendar than most states. None of it is complicated once you know the sequence: federal EIN, state withholding account, SUI account, then a pay schedule that fits Vermont's rules. Here's the process.

1. Get a Federal EIN

Every employer needs an Employer Identification Number from the IRS. Apply free at irs.gov/ein, and you'll have the number within minutes if you apply online. You'll use it for every Vermont registration and filing that follows.

2. Register for State Withholding

Register with the Vermont Department of Taxes through the myVTax portal to open a withholding account. Every Vermont employee completes Form W-4VT, the state's Employee's Withholding Allowance Certificate, separate from the federal W-4. Keep both forms on file, since Vermont withholding is calculated from the W-4VT and the state's own tables, not from the federal form.

3. Set Up Your SUI Account

Register with the Vermont Department of Labor for an unemployment insurance account as soon as you have an employee. The SUI taxable wage base is $15,400 per employee for 2026, and the standard new employer rate is 1.0% for most non-construction industries in the rate year that begins July 1, 2026. Vermont's UI rate year runs July through June rather than by calendar year, so check the current rate table whenever the rate year rolls over.

4. Pay Frequency and Workers' Comp

Vermont law defaults to weekly pay, covering wages earned up to six days before the payment date. Employers can switch to biweekly or semimonthly schedules after giving employees advance notice, still under that same six-day lag. An employee who quits must be paid by the next regular payday (or the following Friday if none is set), and an employee who is discharged must be paid within 72 hours. Vermont's minimum wage for 2026 is $14.42 per hour, well above the federal floor, and adjusts each January under state law.

Workers' compensation insurance is mandatory for virtually every Vermont employer with at least one employee, covering full-time, part-time, seasonal, and temporary workers alike. Coverage is overseen by the Workers' Compensation Division of the Vermont Department of Labor.

5. Report New Hires

Report every new or rehired employee within 10 days of their first day of work, through the Vermont Department of Labor's Employer e-Services portal. That deadline is tighter than the 20-day federal standard many other states use, so don't assume you have extra time. You'll need the employee's name, address, Social Security number, start date, and your EIN.

6. Run Payroll and Make Deposits

Each pay period, calculate gross wages, withhold federal income tax from the employee's W-4, withhold Vermont income tax using the W-4VT and current withholding tables, and withhold FICA (Social Security and Medicare), matching the employee's FICA share as the employer. Deposit federal withholding and FICA on your IRS schedule, and remit Vermont withholding on the schedule the Department of Taxes assigns based on your liability. File Form 941 each quarter for the federal side.

Use our paycheck calculator to check gross-to-net math for Vermont employees, and send new hires to our W-4 helper for the federal form (remembering they still need the W-4VT separately).

7. File Year-End W-2s

By January 31, issue Form W-2 to every employee, reporting both federal and Vermont wages and withholding, and file copies with the Social Security Administration. File your fourth-quarter Form 941 and annual Form 940 by the same date, and reconcile your Vermont withholding filings for the year through myVTax. Keep your SUI wage reports current with the Department of Labor on their normal quarterly schedule.

Payroll Software That Handles Vermont's Extra Form

Vermont's rules are manageable once everything is registered, but the W-4VT, the weekly-pay default, and the July-to-June UI rate year each add a step most national guides skip over. Gusto handles federal and Vermont withholding calculations, tracks the W-4VT alongside the federal W-4, files SUI reports with the Department of Labor, and issues W-2s at year-end.

Frequently Asked Questions

What withholding form do Vermont employees fill out?

Vermont employees complete Form W-4VT, the Employee's Withholding Allowance Certificate, in addition to the federal Form W-4. Employers keep the W-4VT on file and use it, along with the state's withholding tables, to calculate Vermont income tax withholding.

How often must Vermont employers pay employees?

Vermont law defaults to weekly pay, covering wages earned up to six days before the payment date. Employers may switch to biweekly or semimonthly schedules after giving employees notice, still subject to the same six-day lag rule.

Is workers' compensation insurance required in Vermont?

Yes. Vermont requires workers' compensation insurance for virtually every employer with at least one employee, covering full-time, part-time, seasonal, and temporary workers. Coverage is overseen by the Workers' Compensation Division of the Vermont Department of Labor.

What is the SUI wage base and new employer rate in Vermont for 2026?

Vermont's SUI taxable wage base is $15,400 per employee for calendar year 2026. The new employer rate is 1.0% for most non-construction industries in the rate year beginning July 1, 2026, though Vermont's UI rate year runs July through June rather than by calendar year.