Florida is one of only nine states in the country with no personal income tax, and that single fact saves the average Florida worker hundreds of dollars every single paycheck. But here is where business owners get tripped up: no state income tax does not mean no payroll taxes. If you are asking what are payroll taxes in florida, the short answer is that you still owe a stack of federal taxes plus one important state-level tax that catches many new employers completely off guard.
Misunderstanding these obligations is one of the fastest ways to rack up penalties, interest charges, and letters from the IRS or the Florida Department of Revenue. In this guide, you will learn exactly which taxes you withhold from employees, which ones you pay out of your own pocket, how Florida’s reemployment tax works, the deadlines you cannot miss, and the mistakes that cost small businesses thousands of dollars every year. Whether you just hired your first employee or you run payroll for a hundred people, you will walk away knowing precisely what you owe and when you owe it.
Understanding Florida’s Payroll Tax Landscape
Payroll taxes in Florida are the combination of federal taxes (Social Security, Medicare, federal income tax withholding, and federal unemployment tax) plus one state tax called reemployment tax, which employers pay entirely on their own without withholding anything from employee wages. Because Florida has no state income tax, no local income tax, and no state disability insurance program, the state side of your payroll tax burden is remarkably light compared to places like California or New York.
Think of payroll taxes in two buckets. The first bucket holds taxes you withhold from your employee’s gross pay. That money never really belongs to you; you are simply holding it in trust and passing it along to the government. The second bucket holds employer-paid taxes, which come straight out of your business bank account and represent a real cost of employment on top of wages.
Here is a quick breakdown of who pays what in Florida:
| Tax | Who Pays | Applies in Florida? |
|---|---|---|
| Federal income tax withholding | Employee (withheld) | Yes |
| Social Security (OASDI) | Employee and employer | Yes |
| Medicare | Employee and employer | Yes |
| Additional Medicare tax | Employee only | Yes |
| Federal unemployment tax (FUTA) | Employer only | Yes |
| Florida reemployment tax | Employer only | Yes |
| State income tax withholding | N/A | No |
| Local or city income tax | N/A | No |
| State disability or paid family leave | N/A | No |
That table alone answers most of the confusion. Florida keeps things simple on the state level, but the federal requirements are identical to every other state, and they carry the heaviest penalties when you get them wrong.
Federal Payroll Taxes Every Florida Employer Must Handle
Federal taxes make up the bulk of what you deal with as a Florida employer. They break down into three main categories, and each one works a little differently. Let’s go through them one at a time so you know exactly what hits each paycheck.
FICA: Social Security and Medicare
FICA stands for the Federal Insurance Contributions Act, and it funds Social Security and Medicare. This is a shared tax, meaning you and your employee each pay half. The Social Security portion sits at 6.2 percent for the employee and 6.2 percent for the employer, for a combined 12.4 percent. Medicare adds 1.45 percent from each side, for a combined 2.9 percent. Add it together and the total FICA rate is 15.3 percent split evenly.
Social Security tax only applies up to an annual wage base limit, which the Social Security Administration adjusts every year for inflation (it has hovered in the $168,000 to $180,000 range in recent years). Once an employee crosses that threshold, you stop withholding Social Security for the rest of the calendar year. Medicare has no wage cap at all. On top of that, employees who earn more than $200,000 in a year owe an extra 0.9 percent Additional Medicare Tax on the amount above that line. You withhold it, but you do not match it.
Federal Income Tax Withholding
Federal income tax withholding is not a flat rate. You calculate it based on the employee’s Form W-4, their gross wages, and their pay frequency using the IRS Publication 15-T withholding tables. Every new hire must complete a W-4 before their first paycheck. If they never turn one in, the IRS requires you to withhold as if they are single with no adjustments, which usually means a higher withholding amount.
FUTA: Federal Unemployment Tax
FUTA is 100 percent employer-paid. The gross rate is 6.0 percent on the first $7,000 of each employee’s annual wages. However, if you pay your Florida reemployment tax on time and in full, you earn a credit of up to 5.4 percent, dropping your effective FUTA rate to just 0.6 percent. That works out to a maximum of $42 per employee per year. Miss your state payments and you lose that credit, which multiplies your FUTA bill by ten.
- Social Security: 6.2 percent employee plus 6.2 percent employer, capped at the annual wage base
- Medicare: 1.45 percent employee plus 1.45 percent employer, no cap
- Additional Medicare: 0.9 percent employee only on wages above $200,000
- Federal income tax: variable, based on Form W-4 and IRS tables
- FUTA: 0.6 percent effective rate on the first $7,000 per employee, employer only
Florida Reemployment Tax Explained
Florida calls its unemployment insurance tax “reemployment tax,” and it is the only true state payroll tax you will deal with. The Florida Department of Revenue administers it, and the money funds unemployment benefits for workers who lose their jobs through no fault of their own. Here is the critical part: you never withhold reemployment tax from employee wages. It is entirely an employer expense, and deducting it from a paycheck is illegal.
New employers in Florida start at an initial rate of 2.7 percent on the first $7,000 of each employee’s wages per calendar year. That taxable wage base of $7,000 is one of the lowest in the nation, which keeps the total cost manageable. At the initial rate, the maximum you would pay is $189 per employee per year. After you have been in business long enough to build a claims history, the state assigns you an experience rate that can drop as low as 0.10 percent or climb as high as 5.4 percent.
How Your Experience Rate Gets Calculated
Florida reviews your account each year and compares the taxes you have paid against the benefits former employees have collected. If few of your former workers file claims, your rate falls. If you lay people off frequently, your rate rises. The Department of Revenue mails a Reemployment Tax Rate Notice (Form RT-20) each year, usually in December, showing your rate for the coming year.
| Scenario | Rate | Max Annual Cost Per Employee |
|---|---|---|
| New employer (standard) | 2.7% | $189 |
| Minimum experience rate | 0.10% | $7 |
| Maximum experience rate | 5.4% | $378 |
Consider a landscaping company in Tampa with 12 full-time employees, all earning well above $7,000 a year. As a new employer at 2.7 percent, the company owes $189 times 12, or $2,268 in reemployment tax for the year. After five years with zero unemployment claims, the rate might drop to 0.5 percent, cutting the annual bill to about $420. That is a real, measurable reward for stable employment practices.
Who Must Register and When Coverage Kicks In
Not every Florida business owes reemployment tax right away. The state sets specific thresholds, and you become a liable employer the moment you cross any one of them. Registering late does not erase the taxes you owed during the months you should have been reporting, so it pays to know these triggers early.
You must register for Florida reemployment tax if any of the following apply to your business:
- You pay $1,500 or more in gross wages during any calendar quarter in the current or preceding calendar year.
- You have at least one employee for any portion of a day in 20 or more different weeks during a calendar year.
- You acquire all or part of an existing Florida business that was already liable for reemployment tax.
- You are an agricultural employer paying $10,000 or more in cash wages in a quarter, or employing five or more workers for 20 weeks.
- You are a domestic employer paying $1,000 or more in cash wages in any calendar quarter.
- You are a nonprofit with 501(c)(3) status employing four or more workers for 20 weeks in a calendar year.
- You are already liable for federal unemployment tax (FUTA) and have employees in Florida.
Registration happens online through the Florida Department of Revenue’s website using the Florida Business Tax Application, Form DR-1. The process is free, takes about 20 minutes, and gives you a reemployment tax account number you will use on every quarterly return. You also need a federal Employer Identification Number (EIN) from the IRS before you can register with the state, and that application takes just a few minutes online.
A common scenario: a Jacksonville coffee shop opens in March and hires three part-time baristas. By the end of the second quarter, the shop has paid $9,400 in wages. Because that exceeds $1,500 in a single quarter, the owner became a liable employer during the second quarter and must register and file a return for that quarter, even though the business is only a few months old.
Filing Deadlines, Forms, and Deposit Schedules
Knowing what you owe is only half the battle. Paying and filing on time is what keeps you out of trouble. Federal and state deadlines run on different calendars, so build both into your bookkeeping routine.
Federal Deposit Schedules
The IRS assigns you either a monthly or semiweekly deposit schedule based on your total tax liability during a 12-month lookback period ending June 30 of the prior year. If you reported $50,000 or less, you deposit monthly, by the 15th of the following month. If you reported more than $50,000, you deposit semiweekly, meaning taxes on Wednesday through Friday paydays are due the following Wednesday, and taxes on Saturday through Tuesday paydays are due the following Friday. All federal deposits go through the Electronic Federal Tax Payment System (EFTPS).
Key Forms and Due Dates
| Form | Purpose | Frequency | Due Date |
|---|---|---|---|
| Form 941 | Report federal income tax, Social Security, Medicare | Quarterly | Last day of month after quarter ends |
| Form 940 | Report FUTA | Annually | January 31 |
| Form W-2 | Employee wage statement | Annually | January 31 |
| Form W-3 | Transmittal of W-2s to SSA | Annually | January 31 |
| Form RT-6 | Florida reemployment tax return | Quarterly | Last day of month after quarter ends |
| New hire report | Report new employees to Florida | Per hire | Within 20 days of hire |
Florida’s RT-6 quarterly deadlines fall on April 30, July 31, October 31, and January 31. Employers with 10 or more employees must file and pay electronically. Even if you paid zero wages in a quarter, you still have to file a zero return once you have an active account. Skipping it triggers a penalty.
Do not forget new hire reporting either. Florida requires you to report every new or rehired employee to the Florida New Hire Reporting Center within 20 days of their first day of work. This system helps enforce child support orders, and failing to report can bring fines of $25 per unreported employee, rising to $500 if the state finds you and the employee conspired to avoid reporting.
Calculating Payroll Taxes Step by Step
Numbers make this concrete. Let’s walk through a full calculation for a single employee so you can see how each piece stacks up. Suppose you run a small marketing agency in Orlando and pay an employee $5,000 per month, which is $60,000 a year. The employee is single, claims no dependents on their W-4, and gets paid twice a month.
Here is the order of operations for every pay period:
- Start with gross wages for the period. In this case, $2,500 per semimonthly paycheck.
- Subtract any pre-tax deductions such as traditional 401(k) contributions, health insurance premiums under a Section 125 plan, or HSA contributions. Say the employee puts $150 toward health insurance, leaving $2,350 in taxable wages.
- Calculate Social Security: $2,350 times 6.2 percent equals $145.70 withheld. You match that same amount.
- Calculate Medicare: $2,350 times 1.45 percent equals $34.08 withheld. You match it again.
- Calculate federal income tax withholding using IRS Publication 15-T and the employee’s W-4. For this profile, roughly $210 to $230 per paycheck is typical.
- Skip state income tax withholding entirely. Florida has none.
- Subtract post-tax deductions such as Roth 401(k) contributions or wage garnishments.
- Calculate your employer-only taxes separately. FUTA and reemployment tax apply only until the employee hits $7,000 in year-to-date wages, so both stop after roughly the first three paychecks.
In this example, the employee takes home around $1,940 per paycheck. Your employer cost per paycheck is $145.70 for Social Security plus $34.08 for Medicare, or about $179.78, plus reemployment tax and FUTA early in the year. Over 12 months, the employer share of FICA on $60,000 comes to about $4,590, and the FUTA plus reemployment tax combined adds roughly $231 at new-employer rates. Total employer payroll tax cost: around $4,821, or about 8 percent on top of salary.
That 8 percent figure is worth memorizing. When you budget for a new hire in Florida, plan on payroll taxes adding roughly 8 to 10 percent to the salary, before you even factor in benefits, workers’ compensation insurance, or equipment.
Common Mistakes Florida Employers Make
Payroll errors rarely come from bad math. They come from misunderstandings about the rules. These are the mistakes that show up over and over in Florida businesses, and each one carries a real dollar cost.
Misclassifying Workers as Independent Contractors
This is the single most expensive mistake. Some business owners label workers as 1099 contractors to avoid payroll taxes entirely. The IRS and Florida Department of Revenue both apply control tests to determine true status. If you set the schedule, provide the tools, direct how the work gets done, and the worker only serves your business, that person is almost certainly an employee. Getting caught means back taxes, interest, penalties, and potentially personal liability for the owner.
Assuming No State Income Tax Means No State Filings
Plenty of new Florida employers skip registering for reemployment tax because they hear “Florida has no income tax” and assume they are done at the federal level. The RT-6 still comes due four times a year, and unfiled returns accumulate penalties of $25 per report plus interest on unpaid tax.
Withholding Reemployment Tax From Paychecks
Reemployment tax is an employer expense, full stop. Deducting it from wages violates Florida law and creates wage claim exposure. If you use payroll software, double-check that it is not miscoded.
- Missing the $7,000 wage base cutoff and continuing to pay reemployment tax all year on high earners, which overpays the state
- Failing to file zero-wage RT-6 returns during slow quarters
- Losing the 5.4 percent FUTA credit by paying state reemployment tax late
- Forgetting to report new hires within the 20-day window
- Using an outdated Form W-4 version for new employees
- Not tracking tipped employee wages properly in restaurants and hospitality, where Florida has a large workforce
- Mixing personal and payroll funds, so withheld taxes get spent before the deposit date
That last one deserves emphasis. Withheld income tax and the employee half of FICA are trust fund taxes. If you spend that money, the IRS can pursue the Trust Fund Recovery Penalty, which pierces your corporate or LLC liability shield and holds owners and responsible officers personally liable for 100 percent of the unpaid amount. No bankruptcy discharges it. Keep withheld taxes in a separate account if cash flow ever gets tight.
Tools, Software, and Smart Practices for Staying Compliant
You do not have to run these calculations by hand. Modern payroll platforms handle federal withholding tables, Florida reemployment tax rates, deposit schedules, and year-end forms automatically. The question is which approach fits your business size and budget.
Comparing Your Options
| Approach | Best For | Typical Cost | Trade-off |
|---|---|---|---|
| Manual with IRS tables | 1-2 employees, tight budget | $0 | High error risk, time-consuming |
| Payroll software (Gusto, QuickBooks, Patriot) | 2-50 employees | $40-$150 per month | You still review and approve |
| Full-service payroll provider (ADP, Paychex) | 20+ employees, complex needs | $150-$500+ per month | Higher cost, less flexibility |
| PEO (professional employer organization) | Businesses wanting bundled benefits | 2-12% of payroll | Co-employment relationship |
| Local CPA or bookkeeper | Owners who want a human advisor | $100-$400 per month | Depends on responsiveness |
Beyond software, a few habits separate the businesses that never get an IRS notice from the ones that get them every year. Reconcile your quarterly Form 941 totals against your general ledger before you file. Compare the sum of your four quarterly 941s against your annual W-2 and W-3 totals every January; mismatches trigger automatic IRS letters. Save your Form RT-20 rate notice each December and update the rate in your payroll system immediately, because using last year’s rate throws off every calculation.
Free resources are genuinely useful here too. The Florida Department of Revenue offers a Reemployment Tax Employer Guide and free online tutorials. The IRS publishes Publication 15 (Circular E), the employer’s tax guide, updated every year, along with Publication 15-T for withholding tables. Both are worth skimming once a year, and both are free.
One practical tip that saves real money: set a calendar reminder for the 10th of every month to verify your prior month’s deposits cleared. Catching a failed EFTPS payment on the 10th means you can fix it before the 15th deadline. Catching it after the fact means a failure-to-deposit penalty of 2 to 15 percent depending on how late you are.
Questions Florida Employers Ask Most
Some questions come up again and again, whether you are hiring your first employee or expanding into Florida from another state. Here are straight answers to the ones that matter most.
Do remote employees living in Florida change anything?
If your business operates in another state but your employee lives and works in Florida, you generally owe Florida reemployment tax on their wages, not the other state’s unemployment tax. State unemployment insurance follows where the work happens. You will need to register with the Florida Department of Revenue even if you have no physical office here. Federal taxes stay the same regardless of location.
What about owners and family members?
It depends on your business structure. Sole proprietors and partners do not pay payroll taxes on their own draws; they pay self-employment tax instead. S corporation shareholder-employees must take reasonable W-2 wages and pay full payroll taxes on those wages. A sole proprietor’s child under 18 is exempt from FICA and FUTA, and a spouse working in a sole proprietorship is exempt from FUTA. These exemptions do not carry over to corporations or LLCs taxed as corporations.
Are bonuses and commissions taxed differently?
Bonuses count as supplemental wages. You can withhold federal income tax at a flat 22 percent (for supplemental wages up to $1 million per year) or combine them with regular wages and use the standard tables. Either way, Social Security, Medicare, FUTA, and reemployment tax all apply exactly as they do to regular pay.
- Do I pay reemployment tax on part-time workers? Yes, on the first $7,000 of wages, regardless of hours.
- What if an employee works in two states? Apply the four-factor test: localization of service, base of operations, place of direction, and employee residence, in that order.
- Does Florida require workers’ compensation? Most employers with four or more employees must carry it, and construction businesses need it with just one. It is insurance, not a payroll tax, but it is a related cost.
- Do I need to keep payroll records? Yes. The IRS requires four years of employment tax records, and Florida requires five years of reemployment tax records.
- Can I get a refund if I overpay reemployment tax? Yes, file an amended RT-6 or contact the Department of Revenue within the statute of limitations.
What Is Changing and How to Stay Ahead
Payroll rules are not static. The Social Security wage base rises almost every year in step with national wage growth, jumping from $137,700 in 2020 to well over $170,000 in recent years. Expect that climb to continue, which quietly increases employer costs for higher-paid staff each January.
Florida’s taxable wage base of $7,000 has stayed put for decades, which is unusual. Many states index their wage base to average wages, and some have pushed past $50,000. If Florida ever raises its base, employer reemployment tax costs would rise sharply overnight. Legislators have discussed it during periods when the state’s unemployment trust fund ran low, so it is worth watching. The trust fund took a heavy hit during 2020, and rates temporarily spiked before the state took action to hold them down.
Electronic filing requirements also keep tightening. The IRS lowered its e-filing threshold so that businesses filing 10 or more information returns of any type combined must file electronically. Paper W-2s and 1099s are becoming the exception rather than the rule. Florida already requires electronic RT-6 filing for employers with 10 or more employees and encourages it for everyone else.
- Watch for the annual Social Security wage base announcement each October
- Review your Form RT-20 rate notice every December and update your software
- Confirm the current FUTA credit reduction status; states that borrow from the federal unemployment fund lose part of the 5.4 percent credit, and Florida has avoided this in recent years
- Track remote work trends, since multi-state teams complicate state unemployment tax assignment
- Expect more automation and real-time reporting requirements over the next several years
The broader trend favors employers who automate. Payroll platforms now push rate updates automatically, flag deposit deadlines, and file returns without manual intervention. Businesses still handling payroll on spreadsheets face growing risk as reporting rules get more granular and enforcement gets more data-driven.
Florida gives employers a genuine advantage: no state income tax withholding, no local income tax, and no state disability program. Your entire state-level payroll tax obligation boils down to reemployment tax at 2.7 percent for new employers on just the first $7,000 of each worker’s wages. Everything else is federal, and it works the same way in Miami as it does in Minneapolis. Master the four moving pieces (FICA, federal income tax withholding, FUTA, and reemployment tax) and you have mastered Florida payroll.
The businesses that stay out of trouble share three habits: they register on time, they never spend withheld trust fund taxes, and they file every quarterly return even when there is nothing to report. Set up reliable payroll software, calendar your deadlines, and keep your Form RT-20 rate notice somewhere you will find it in January. Do that, and payroll taxes shift from a source of anxiety to a routine line item you handle in minutes each pay period, freeing you to focus on growing the business you actually set out to build.