2011 Minnesota Payroll Tax Tables

The Minnesota department of revenue has released a draft version of the 2011 payroll tax withholding tables for wages paid on and after January 1, 2011. If you are using a payroll software such as Payroll Mate (www.PayrollMate.com) then the new tables will be automatically reflected in the payroll tax calculator that ships with the product.

Below are the details of the new payroll withholding formula:

(1) Effective for wages paid beginning January 1, 2011. Supersedes any formulas before January 1, 2011.

(2) Use this formula to determine how much Minnesota payroll tax to withhold from employees’ wages.

(3) Steps for calculating Minnesota payroll tax withholding:

Step 1 : Determine the employee’s total wages for one payroll period.

Step 2: Multiply the total wages from step 1 by the number of payroll periods you have in a year. The result is the employee’s annual wage.

Multiply step 1 by: 360 if you pay by the day

52 if you pay by the week

26 if you pay every two weeks

24 if you pay twice a month

12 if you pay once a month

Step 3 : Multiply the number of the employee’s withholding allowances by $3,700.

Step 4 : Subtract the result in step 3 from the result in step 2.

Step 5 : Use the result from step 4 and the chart attached to calculate an amount for step 5.

Step 6 :Divide the result in step 5 by the number of payroll periods that you used in step 2. You may round the amount to the nearest dollar. The result is the amount of Minnesota income tax to withhold from the employee’s wages.

To learn more about Minnesota payroll tax you can visit the Minnesota department of revenue or the Minnesota payroll software page.