North Dakota employers must handle several payroll tax obligations: graduated 0%–2.5% (very low) state income tax withholding, SUI contributions (0.08%–9.69% on the first $40,700 per employee), plus all federal payroll taxes (FICA at 7.65%, FUTA at 0.6% on the first $7,000). New employers pay an SUI rate of 1.02%.
Table of Contents
Overview: North Dakota Payroll Tax Landscape
Running payroll in North Dakota means managing both state and federal tax obligations. Here is the complete picture of what North Dakota employers owe:
| Tax | Who Pays | Rate | Wage Base |
|---|---|---|---|
| North Dakota Income Tax | Employee (employer withholds) | graduated 0%–2.5% (very low) | All wages |
| North Dakota SUI | Employer | 0.08%–9.69% | $40,700 |
| Social Security (FICA) | Split 50/50 | 6.2% each | $176,100 |
| Medicare (FICA) | Split 50/50 | 1.45% each | No limit |
| FUTA | Employer | 0.6% (after credit) | $7,000 |
State Income Tax: graduated 0%–2.5% (very low)
North Dakota has a graduated income tax with very low rates from 0% to 2.5%. It is one of the lowest income tax rates in the nation, barely more than states with no income tax.
As an employer, you are responsible for withholding North Dakota state income tax from every employee’s paycheck based on the withholding tables published by the North Dakota Office of State Tax Commissioner. You must remit these withholdings on the schedule assigned by the state — typically monthly or quarterly depending on your total tax liability.
For details, visit the North Dakota Office of State Tax Commissioner website.
💼 From the Payroll Desk
North Dakota’s SUI wage base of $40,700 is a shock compared to neighboring states like South Dakota ($15,000). Don’t assume the low income tax means low overall payroll costs — budget for significantly higher per-employee unemployment taxes.
State Unemployment Insurance (SUI)
North Dakota SUI is an employer-paid tax on the first $40,700 of each employee’s wages per year. New employers pay 1.02%. Experienced employers are rated between 0.08%–9.69% based on their claims history.
SUI is administered by the North Dakota Job Service. You must register for an SUI account when you hire your first employee and file quarterly wage reports.
For a detailed breakdown, see our North Dakota SUI Rates 2026 guide.
Federal Payroll Taxes
On top of North Dakota state obligations, every employer must handle federal payroll taxes:
- FICA (Social Security + Medicare): 7.65% employer share, 7.65% employee share. Social Security applies to the first $176,100; Medicare has no cap.
- FUTA: 0.6% employer-only tax on the first $7,000 per employee (after state SUI credit).
- Federal Income Tax Withholding: Based on employee W-4 and IRS tables. Employer withholds but does not pay.
For a complete breakdown, see our Federal Payroll Tax Basics guide.
Filing Schedules and Deadlines
Key deadlines for North Dakota employers:
- Federal 941: Quarterly — due by the last day of the month after each quarter
- Federal 940 (FUTA): Annual — due January 31
- North Dakota SUI: Quarterly wage reports — due by the last day of the month after each quarter
- North Dakota Income Tax Withholding: Monthly or quarterly, based on your liability
- W-2s: Due to employees by January 31, filed with SSA by January 31
Penalties for Late Filing and Payment
Late or missed payroll tax payments result in penalties at both the federal and state level:
- IRS: Failure-to-deposit penalties range from 2% to 15% depending on how late
- North Dakota: State penalties vary but typically include interest on unpaid balances plus fixed or percentage-based penalty fees
- Trust fund penalty: The IRS can hold business owners personally liable for unpaid withholding taxes (the “Trust Fund Recovery Penalty”)
Frequently Asked Questions
What payroll taxes do North Dakota employers pay?
North Dakota employers pay federal payroll taxes (FICA, FUTA) and state unemployment insurance (SUI) on the first $40,700 of wages per employee. Employers also withhold North Dakota state income tax (graduated 0%–2.5% (very low)) from employee paychecks.
What is the North Dakota SUI wage base for 2026?
The North Dakota SUI wage base for 2026 is $40,700. Employers pay SUI on the first $40,700 of each employee's wages per year.
What is the new employer SUI rate in North Dakota?
New employers in North Dakota typically pay an SUI rate of 1.02%. Experienced employer rates range from 0.08%–9.69% based on claims history.
When are North Dakota payroll taxes due?
North Dakota SUI taxes are typically filed quarterly. State income tax withholding is remitted on the schedule assigned by the North Dakota Office of State Tax Commissioner — monthly or quarterly based on liability. Check with the North Dakota Office of State Tax Commissioner for current due dates.
Does North Dakota have local payroll taxes?
Some North Dakota municipalities may impose local taxes. Check with local authorities for specific requirements.
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Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of February 2026 and may not reflect recent changes in federal or North Dakota state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with North Dakota law before making payroll or compliance decisions for your business.