What Is Missouri Payroll Tax?
Missouri payroll tax refers to the state and local payroll taxes that employers must withhold from employee wages or pay directly to state and municipal agencies. These taxes fund unemployment benefits, Missouri individual income tax system, and public services in cities that impose local earnings or payroll taxes.
Missouri state-level payroll system includes employer-funded unemployment insurance and employee state income tax withholding. Most Missouri cities and counties don't impose a local income tax on employee wages, but Kansas City and St. Louis are major exceptions. Both cities impose a 1% earnings tax, and St. Louis also imposes a separate 0.5% employer-paid payroll expense tax on compensation for work performed within the city.
Most Missouri employers are responsible for the following payroll tax requirements:
- Unemployment Insurance (UI), administered by the Missouri Division of Employment Security
- Missouri Individual Income Tax withholding, administered by the Department of Revenue using the state's withholding tables and employee Form MO W-4
- Local Earnings Tax and, in St. Louis, Payroll Expense Tax, when employees live or perform services in an applicable city
Missouri Payroll Taxes at a Glance
| Payroll Tax | Paid By | Purpose |
|---|---|---|
| Unemployment Insurance (UI) | Employer | Provides temporary income for eligible unemployed workers |
| Individual Income Tax (state) | Employee (withheld by employer) | State income tax withheld from employee wages |
| Local Earnings and Payroll Expense Taxes | Employee and, for the St. Louis payroll expense tax, employer | Funds municipal services in Kansas City and St. Louis |
Understanding who pays each tax and recognizing that Missouri local payroll taxes are concentrated primarily in Kansas City and St. Louis rather than imposed statewide helps employers avoid both missed city registrations and unnecessary local withholding in jurisdictions where no earnings tax applies.
Missouri Employer Payroll Tax Responsibilities
Every employer with workers in Missouri has payroll tax responsibilities beyond simply issuing paychecks. Depending on your business, you'll generally need to:
- Register your business with the Missouri Division of Employment Security and the Missouri Department of Revenue.
- Obtain a Missouri unemployment insurance employer account and state withholding tax account.
- Collect a completed Missouri Employee's Withholding Certificate, Form MO W-4, from each employee.
- Withhold Missouri individual income tax from taxable employee wages.
- Pay employer UI contributions using the rate assigned to your unemployment account.
- File quarterly unemployment contribution and wage reports through UInteract.
- File Missouri withholding returns and remit withheld taxes according to the assigned filing schedule.
- Identify employees who live or work in Kansas City or St. Louis and register for applicable local earnings-tax withholding.
- Pay the St. Louis payroll expense tax when employees perform services within the City of St. Louis and no exemption applies.
- Submit required annual reconciliation and W-2 information to state and applicable local agencies.
- Report every new hire and rehire to the Missouri Department of Revenue within 20 days.
- Maintain payroll records for state and local compliance.
Many businesses use payroll software with built-in Missouri and city tax rules, since the correct local treatment can depend on both employee residence and the physical location where services are performed.
Types of Missouri Payroll Taxes
Unemployment Insurance (UI)
Unemployment Insurance is an employer-funded payroll tax administered by the Missouri Division of Employment Security that provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own.
Employers pay this tax directly it is never deducted from employee paychecks.
Missouri assigns new employers a rate based on their industrial classification and later assigns an experience rate based on factors such as taxable payroll, benefit charges, and the balance in the employer's unemployment account. Applicable contribution-rate adjustments may also affect the final rate.
Key Facts
- Paid entirely by employers Missouri has no employee UI contribution
- Calculated on the first $9,000 of each employee's wages for 2026
- The general 2026 new-employer rate is 2.376% for mining, construction, and most other employers
- Qualifying new nonprofit organizations described under Section 501(c)(3) are assigned a 1.0% rate unless they elect reimbursable status
- Experienced employers receive an individually calculated annual contribution rate
- Contribution-rate adjustments, maximum-rate surcharges, or special program rules may affect the final assigned rate
- Most Missouri employers receive a federal FUTA tax credit of up to 5.4% for timely state UI payment, bringing the effective FUTA rate down to about 0.6%
- Must be reported quarterly through the Missouri UInteract employer system
Missouri Individual Income Tax Withholding
Missouri imposes a graduated individual income tax, and employers calculate payroll withholding using official Department of Revenue withholding tables or the percentage-method formula. The calculation is based on taxable wages, payroll frequency, and the filing status and additional withholding information reported on Form MO W-4.
Employers are responsible for:
- Withholding Missouri income tax from taxable wages using current Department of Revenue withholding tables or the official formula
- Collecting Form MO W-4 from new employees and employees who change their withholding elections
- Withholding at the single filing-status calculation when an employee fails to provide a completed Form MO W-4
- Reporting withholding to the Missouri Department of Revenue
- Depositing withheld taxes on an annual, quarterly, monthly, or quarter-monthly schedule, depending on the employer's liability
- Filing required withholding returns, annual reconciliation information, and employee W-2 records
For supplemental wages paid separately from regular wages, employers that withhold Missouri tax from the employee's regular wages may generally use a flat 4.7% withholding rate or calculate withholding by combining the supplemental and regular wages. Missouri generally requires withholding from nonresidents for services performed in the state and doesn't maintain broad reciprocal withholding agreements with neighboring states.
Local Earnings and Payroll Expense Taxes
Most Missouri municipalities don't impose a local payroll income tax, but Kansas City and St. Louis each impose a 1% earnings tax. Employers must carefully review both employee residence and work location because residents can owe city tax even when they work outside the city, while nonresidents can owe tax on compensation earned for services performed inside the city.
Key rules employers need to know:
- Kansas City imposes a 1% earnings tax on residents taxable earnings and on compensation earned by nonresidents for services performed within Kansas City
- Kansas City employers with an earnings-tax withholding account generally remit tax at the same frequency used for Missouri state withholding and file Form RD-110 quarterly
- Kansas City requires an annual Form RD-113 reconciliation and applicable W-2 information by January 31
- St. Louis imposes a 1% earnings tax on residents wages and on wages earned by nonresidents working within the City of St. Louis
- Employers with workers in St. Louis file quarterly earnings-tax withholding on Form W-10
- St. Louis also imposes a separate 0.5% employer-paid payroll expense tax on gross compensation paid for services performed within the city
- The St. Louis payroll expense tax is reported quarterly on Form P-10 and isn't deducted from employee wages
- Employers must register separately with the applicable city because Missouri state payroll-tax registration doesn't automatically create a Kansas City or St. Louis tax account
Because Missouri local payroll taxes are limited primarily to its two largest cities, employers should treat city-tax review as a location-specific step. Any employee who lives or performs services in Kansas City or St. Louis should be evaluated for local withholding, apportionment, registration, and reporting requirements.
Which Payroll Taxes Are Paid by Employers vs Employees?
| Tax | Employer Pays | Employee Pays |
|---|---|---|
| Unemployment Insurance (UI) | YES | NO |
| Individual Income Tax (state) | NO | Withheld from wages using state withholding tables |
| Local Earnings and Payroll Expense Taxes | St. Louis employers pay the 0.5% payroll expense tax when applicable | 1% Kansas City or St. Louis earnings tax withheld from applicable wages |
Missouri places the unemployment tax burden on employers, while state and applicable city earnings taxes are withheld from employee wages. St. Louis adds a separate employer-funded payroll expense tax for compensation earned within the city.
Missouri Payroll Tax Rates for Employers
Understanding current Missouri payroll tax rates is essential for calculating payroll accurately. Because experienced-employer UI rates are assigned individually and local tax depends on residence and work location, employers should use their annual contribution-rate notice and current municipal guidance rather than relying on one general percentage.
Missouri Payroll Tax Rates at a Glance
| Payroll Tax | Who Pays | General Rate | Taxable Wage Base |
|---|---|---|---|
| Unemployment Insurance (UI) | Employer | General new employers: 2.376%. Qualifying new 501(c)(3) nonprofits: 1.0%. Experienced employers receive an individually assigned rate | $9,000 for 2026 |
| Individual Income Tax (state) | Employee | Graduated withholding calculated using official Missouri tables and Form MO W-4; separately paid supplemental wages may generally be withheld at 4.7% | Applies to taxable Missouri wages, with no UI-style annual wage cap |
| Local Earnings and Payroll Expense Taxes | Employee and employer | Kansas City earnings tax: 1%. St. Louis earnings tax: 1%. St. Louis employer payroll expense tax: 0.5% | Generally applies to applicable taxable compensation or gross compensation under city rules |
According to the Missouri Division of Employment Security's official 2026 guidance, the general new-employer unemployment tax rate is 2.376%, qualifying new nonprofit employers receive a 1.0% rate, and unemployment tax applies to the first $9,000 paid to each employee during the calendar year. Experienced employers must use the contribution rate shown on their annual Experience Rating Statement and Notice of Contribution Rate.
Instead of relying on a general statewide estimate, employers should review their annual UI rate notice, confirm whether employees have Kansas City or St. Louis tax exposure, and make sure payroll software reflects Missouri's current withholding tables and city rules.
Understanding Taxable Wages
Not every Missouri payroll tax applies to wages the same way. Depending on the tax involved, taxable wages may include:
- Hourly wages
- Salaries
- Bonuses
- Overtime pay
- Commissions
- Certain taxable fringe benefits
UI tax applies only to the first $9,000 of each employee's annual wages, while state income tax withholding generally applies more broadly to taxable Missouri wages without the same wage base cap. Kansas City and St. Louis earnings taxes apply under their own definitions and location rules, while the St. Louis payroll expense tax applies to employer-paid gross compensation for work performed within the city.
Missouri Payroll Tax Filing Deadlines
Meeting payroll tax deadlines is just as important as calculating taxes correctly. Late filings or payments can lead to penalties and interest charges.
Unemployment Insurance (Quarterly Wage Report)
| Reporting Quarter | Filing Deadline |
|---|---|
| January – March | April 30 |
| April – June | July 31 |
| July – September | October 31 |
| October – December | January 31 |
State Income Tax Withholding
Missouri withholding returns and payments may be due annually, quarterly, monthly, or quarter-monthly, depending on the amount withheld. Employers required to withhold less than $100 during each of the preceding four quarters generally file annually. Larger employers may be assigned quarterly, monthly, or quarter-monthly payment requirements. Quarter-monthly remitters generally pay at least 90% of the actual withholding due within three banking days after each quarter-monthly period.
Local Earnings and Payroll Expense Taxes
Kansas City employers generally remit earnings-tax withholding at the same frequency used for Missouri state withholding and file Form RD-110 quarterly, with an annual Form RD-113 reconciliation and W-2 information due January 31. St. Louis employers generally file both the 1% earnings-tax withholding return and the 0.5% payroll expense tax return quarterly using Forms W-10 and P-10.
If a deadline falls on a weekend or holiday, it generally moves to the next business day. Because Missouri payroll can involve state filings and separate Kansas City or St. Louis returns, employers should track each obligation independently.
How to Register for Missouri Payroll Taxes
Before paying employees, businesses typically need to register with the Missouri Division of Employment Security and the Missouri Department of Revenue, and separately with Kansas City or St. Louis when applicable.
State registration: Employers register for unemployment insurance with the Missouri Division of Employment Security and establish a Missouri withholding tax account with the Department of Revenue. Unemployment reporting is managed through UInteract, while state withholding accounts can be managed through the Department of Revenue's online services.
Local registration: Employers with employees who live or work in Kansas City or St. Louis must review the applicable city registration requirements. Kansas City earnings-tax accounts and filings are managed through Quick Tax, while St. Louis earnings-tax and payroll-expense-tax accounts are administered by the City of St. Louis Collector of Revenue.
During registration, you'll generally need information such as:
- Legal business name
- Federal Employer Identification Number (EIN)
- Business entity type
- Business address and all Missouri work locations
- Owner or responsible party information
- Date employees first performed services in Missouri
- Estimated payroll information
How to File Missouri Payroll Taxes
Filing payroll taxes in Missouri involves managing unemployment insurance, state income tax withholding, and applicable city tax obligations in parallel. A typical filing process includes:
Step 1: Calculate Employee Wages
Determine each employee's gross wages, including regular pay, overtime, bonuses, commissions, and other taxable compensation.
Step 2: Determine Applicable Local Jurisdictions
Confirm where each employee lives and physically performs services. Determine whether Kansas City or St. Louis earnings-tax withholding applies and whether compensation must be apportioned for work performed partly outside the applicable city.
Step 3: Calculate Payroll Taxes
Determine your employer UI contribution using your current contribution-rate notice, calculate employee state income tax withholding using Form MO W-4 and the current Missouri tables, and calculate applicable Kansas City or St. Louis taxes.
Step 4: Withhold Employee Taxes
Deduct Missouri individual income tax and applicable Kansas City or St. Louis earnings tax from each paycheck. Do not deduct unemployment insurance or the St. Louis payroll expense tax from employee wages.
Step 5: Pay Employer Contributions and Remit Withholding
Pay employer UI contributions through UInteract, remit Missouri income tax withholding to the Department of Revenue, remit applicable city earnings-tax withholding, and pay the St. Louis employer payroll expense tax when required.
Step 6: File Payroll Tax Returns
Submit quarterly UI contribution and wage reports, Missouri withholding returns according to the assigned filing schedule, and applicable Kansas City or St. Louis quarterly and annual filings.
Step 7: Maintain Payroll Records
Keep detailed payroll records, employee Form MO W-4 certificates, employee residence and work-location information, apportionment records, filed returns, and payment confirmations in case of future audits or compliance reviews.
Following a consistent payroll process helps reduce mistakes and makes year-end reporting significantly easier.
Frequently Asked Questions
Who is required to pay Missouri payroll taxes?
Most businesses that hire employees performing services in Missouri are required to register with the Missouri Division of Employment Security and the Department of Revenue. Employers with workers who live or perform services in Kansas City or St. Louis may also need to register for local earnings-tax withholding and, in St. Louis, the employer payroll expense tax.
What payroll taxes are employers responsible for in Missouri?
Missouri employers generally have responsibilities related to employer-paid unemployment insurance and employee state income tax withholding. Employers with Kansas City or St. Louis tax exposure may also need to withhold a 1% city earnings tax, and St. Louis employers may owe a separate 0.5% payroll expense tax.
How often do employers file Missouri payroll tax returns?
Unemployment insurance is reported quarterly through UInteract. State income tax withholding may be filed annually, quarterly, monthly, or quarter-monthly depending on the employer's assigned schedule. Kansas City and St. Louis employer returns are generally filed quarterly, with additional annual reconciliation requirements where applicable.
How do I register for Missouri payroll taxes?
Employers register for unemployment insurance through the Missouri Division of Employment Security and for state withholding through the Missouri Department of Revenue. Separate registration is required with Kansas City or St. Louis when local earnings or payroll expense taxes apply.
What happens if payroll taxes are filed late?
Late filings or payments may result in penalties, interest charges, collection action, or other compliance issues. Delinquent unemployment contributions may also affect an employer federal FUTA credit. Filing accurately and on time across all applicable agencies helps avoid unnecessary costs.
Does Missouri payroll tax apply to remote employees?
Yes. An employee who physically performs services from a Missouri location may create Missouri withholding and unemployment insurance obligations even when the employer is located in another state. Remote employees who live or work in Kansas City or St. Louis may also create local earnings-tax obligations depending on their residence and where services are performed.
Are Missouri payroll tax rates the same every year?
Not always. Missouri UI taxable wage base, new-employer rate, contribution adjustments, employer-specific experience rate, withholding tables, and municipal tax requirements can change. Employers should review current state and city guidance before processing payroll each year.
Can payroll software calculate Missouri payroll taxes automatically?
Many payroll platforms automatically calculate Missouri UI contributions, state income tax withholding, Kansas City and St. Louis earnings taxes, and the St. Louis payroll expense tax. Employers are still responsible for ensuring employee Form MO W-4 information, residence and work locations, apportionment records, and assigned UI rates are accurate and up to date.
Disclaimer
This article is for general informational purposes only and doesn't constitute legal, tax, or accounting advice. Payroll tax rates, wage bases, withholding tables, local earnings-tax rules, filing requirements, and payment schedules can change. Consult a qualified CPA or tax professional for guidance specific to your business.
