Montana Wage and Payroll Tax Facts
February 02, 2024
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Montana.
Big Sky Country has a slightly higher minimum wage rate than the rates required by the federal government in the Fair Labor Standards Act (FLSA). However, the state doesn't allow tip credits or minimum wage rates based on tip credits.
When it comes to processing payroll, Montana-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
The below information was last updated January 30, 2024. It is not intended as legal or tax advice.
Montana Minimum Wage Rates
|
Wage Type |
Montana Rates |
Federal Rates |
|
Minimum Wage |
$10.30 |
$7.25 |
|
Tipped Minimum Wage |
N/A |
$2.13 |
|
Actual Tip Credit |
N/A |
$5.12 |
Local Minimum Wage Rates
In addition to the state-wide minimum wage rates above, the city of Missoula has unique minimum wage rates as well:
- $10.11 (with health benefits)
- $11.62 (without health benefits)
Montana State Income Tax (SIT) Rates
Montana's SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax.
| Filing Status* | Income Tax Bracket [Over X] - [But not over Y] |
2024 Income Tax Rates |
| Single / Married (filed separately) / Married (filed jointly and both spouses working) |
$0 - $14,600 | 0.00% |
| $14,600 - $35,100 | 4.70% of excess over $14,600 | |
| $35,100 or greater | $964 + 5.90% of excess over $35,100 | |
| Married (filed jointly) / Qualifying Widower | $0 - $29,200 | 0.00% |
| $29,200 - $70,200 | 4.70% of excess over $29,200 | |
| $70,200 or greater | $1,927 + 5.90% of excess over $70,200 | |
| Head of Household | $0 - $21,900 | 0.00% |
| $21,900 - $52,650 | 4.70% of excess over $21,900 | |
| $52,650 or greater | $1,445 + 5.90% of excess over $52,650 |
*Based on which checkbox the employee marked on their submitted Form MW-4. Use the first group of brackets if they checked boxes 1a or 2, the second group of brackets if they checked box 1b, or the third group of brackets if they checked box 1c.
|
Additional Montana SIT Details |
|
|
Supplemental Withholding Computation |
6.00% |
|
Valid Filing Statuses |
|
| Exceptions (rates) | Number of allowances |
|
Exemptions (individuals) |
|
|
Form W-4 |
Form MW-4 |
|
Reconciliation Frequency |
Annual |
Montana State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
Montana SUI Tax Details |
|
|
Taxable Wage Base |
$43,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.13% – 6.12% |
|
Rates for New Employers |
1.00% - 2.20% (based on industry) |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
No |
|
Montana Administrative Surcharge |
0.18% |
Montana State Disability Insurance (SDI) Rates
SDI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. Montana, however, doesn't require employers to collect an SDI tax.
Miscellaneous Montana Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Montana currently has a reciprocal agreement with only North Dakota. Montana-based employers aren't required to withhold SIT from North Dakotan residents and vice versa.
Paid Sick Leave (PSL) Taxes
The state of Montana doesn’t require employers to collect PSL taxes, nor does the state have a program providing such leave to employees.
Paid Sick Leave (PFML) Taxes
The state of Montana doesn’t require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.
Montana Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Department of Labor and Industry for unemployment tax topics.
|
Registration Details |
Department of Revenue |
Department of Labor and Industry |
|
Phone |
(406) 444-6900 |
(406) 444-2840 |
|
Online Registration |
TransAction Portal Homepage | UI eServices Homepage |
|
Registration Form |
Business Registration Form | Department of Labor and Industry Printable Forms |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued in 2 days via the online process or in 2-4 weeks via mail. | Online and paper registration options are available. Account numbers will be issued during the online process or in 1-2 weeks via mail. |
|
Employer Self-Service Login |
TransAction Portal Hompage | UI eServices Homepage |
Additional Montana Payroll Tax Resources
- Montana Unemployment Insurance Division Homepage
- Department of Labor and Industry Employer Handbook
- Montana Business & Income Tax Division Homepage
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.
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