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Overview of Nevada Payroll Taxes

Nevada’s payroll tax system is unique in that the state imposes no personal income tax. Instead, employers are responsible for two primary state levies—the Modified Business Tax (MBT) and Unemployment Insurance (UI)

Modified Business Tax (MBT)

What it is

The MBT is a state excise tax on gross payroll, often referred to as Nevada’s “payroll tax,” imposed above a quarterly threshold.

Rates (2025)

For general businesses, the rate is 1.17% of gross wages above $50,000 per quarter (tax.nv.gov). Financial institutions pay 1.554% on all wages (no exemption).

Credit

Employers may claim a credit equal to 50% of the Nevada Commerce Tax paid in the preceding year.

Who pays & Reporting

Employers register with the Department of Taxation and file quarterly returns—due the last day of the month after each quarter—even if no tax is due.

Penalties

Late filings incur up to a 10% penalty plus 0.75% interest per month; underreported returns face an additional 10% penalty if not appealed within 45 days.

Category	Tax Rate (2023–25)	Wage Exemption per Qtr	Notes
General (non-financial)	1.17%	First $50,000 non-taxable	Filers must still file even if tax due = 0
Financial Institutions	1.554%	None (all wages taxed)	Rate applies after health-benefit deduction; includes certain mining cos.

Unemployment Insurance (UI)

What it is

An employer-funded insurance program administered by NV DETR/ESD; there is no employee contribution in Nevada.

Tax Base (2025)

Wages up to $41,800 per employee per year are taxable (ui.nv.gov).

Rates (2025)

New employers pay 2.95% plus 0.05% CEP until they earn an experience rating; thereafter rates range from 0.25% to 5.40% based on reserve ratios.

Recent Changes

Effective Jan 1, 2025, the wage base rose to $41,800. In late 2023, the council set the average UI rate at 1.65%, down from 2.95%, saving employers ~$507 per employee annually (leg.state.nv.us).

Who pays & Reporting

Employers must register online within 30 days of paying $225+ in a quarter and file quarterly reports (NUCS-4030) due by month-end after each quarter.

Penalties

Late reports incur $5/report plus 0.1% of taxable wages per day after 10 days; late payments accrue 1% interest per month, and extreme cases may lead to liens or criminal penalties.

Class	Taxable Wage Base	Initial Rate (new employer)	Experience Rates	CEP
State UI	$41,800 (2025)	2.95%	0.25% – 5.40%	+ 0.05%

Paid Leave Mandates

Paid Sick Leave (SB312)

Private employers with 50+ employees must accrue 0.01923 hours per hour worked (≈1h/52h), with eligibility after 90 days and carryover limited to 40 hours/year.

Requirement	Details (Private Employers ≥50 emp.)
Accrual	0.01923 hr per work-hour (∼1h/52h)
Eligibility	After 90 days of employment
Usage	No reason required once eligible
Carryover	Up to 40 hours/year
Notice/Records	Balance statement each payday; 1-year recordkeeping
Penalty	Up to $5,000/violation

Paid Family/Medical Leave

State employees receive 8 weeks at 50% wage replacement; some private employers under subsidy agreements must provide up to 12 weeks at 50% salary.

Legislative Proposals

AB 388 (2025) would have extended 12 weeks of paid leave at 100% wage replacement up to 110% of average wage but was vetoed in June 2025 (mynews4.com).

Federal Payroll Taxes

Social Security & Medicare (FICA)

Employers withhold 6.2% for Social Security and 1.45% for Medicare from wages (matched by employer), plus 0.9% additional Medicare on wages over $200,000. The 2025 Social Security wage base is $160,200.

Federal Unemployment Tax (FUTA)

Employers pay 6.0% on the first $7,000 of each employee’s wages, reduced by up to 5.4% state credit—resulting in a net 0.6% for Nevada employers. Returns are filed annually (Form 940).

Employer & Employee Responsibilities

Registration

Employers paying ≥$225 in a quarter register for UI and MBT via the Nevada Business Registration portal.

Withholding & Reporting

Withhold federal FICA and FUTA each payroll; file MBT and UI quarterly and FUTA annually (Form 940).

Documentation

Maintain wage, hour, and leave records; post required notices at each worksite.

Employee Actions

Ensure accurate wage reporting for UI benefits; provide reasonable notice for leave requests under SB312.

Penalties for Noncompliance

Obligation	Due/Action	Penalty for Violation
MBT return & payment	Quarterly – due by last day of following month	Up to 10% of tax + 0.75% interest/month
UI report & payment	Quarterly – due by last day of following month	$5/report + 0.1% daily interest after 10 days
FUTA return (Form 940)	Annually by Jan 31	Late‐filing penalty per IRS rules
Paid sick/leave accrual	Ongoing – 0.01923 hr per work-hour	Labor fines up to $5,000/violation
Paid family leave notice	Provide state leave notices	Up to $5,000/violation

Comparison with Other States

Nevada’s payroll tax burden is moderate: no income tax, a low-rate MBT, and UI rates comparable to other states but on a higher wage base. Unlike states with broad paid leave mandates or disability insurance, many small Nevada businesses (<50 employees) incur no leave costs. Overall, Nevada’s structure is competitive (doola.com).

Economic Impact on Businesses & Workers

Businesses

The MBT adds 1.17% to payroll above $50k exempt; many small firms fall below the threshold. UI rate cuts save ~$507 per employee annually. Leave mandates impose administrative costs but can reduce turnover.

Workers

Employees benefit from robust UI funding and paid sick leave accruals. Unlike high-tax states, Nevada workers face no state payroll taxes beyond FICA/FUTA, preserving take-home pay.

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