Kansas collected $8.06 billion in tax revenue in 2021, according to the US Census Bureau. Kansas collects the majority of its revenue from a personal income tax and a sales tax. Given Kansans' desire for prosperity and liberty, the optimum tax system is one that causes the least amount of economic suffering while sustaining modest government spending.
If you're still having trouble figuring out how to withhold and pay taxes when reporting payroll in Kansas, you've come to the perfect spot. Following are the topics covered:
- Kansas Payroll Taxes and Laws
- How to Run Payroll in Kansas?
- Forms for Payroll
- Account Numbers Needed
- Required Payroll Documentation
- Key takeaways
Kansas Payroll Taxes and Laws
Kansas follows the same rules as the federal government. Most employers in the United States are required to pay Federal Insurance Contributions Act (FICA) taxes, with a few exceptions. The current Social Security FICA tax rate is 6.2 percent of employee wages, and the Medicare FICA tax rate is 1.45 percent.
This amount will be deducted from employee paychecks, and a matching amount will be deducted from your company's bank account. You'll also be liable for paying unemployment taxes and workers' compensation insurance.
It's a good idea to speak with an employment law specialist in your area to ensure that your company complies with all rules and regulations. Review the specifics of doing payroll in Kansas below to ensure you stay in compliance with payroll rules.
Kansas imposes state taxes on businesses and employees in addition to federal taxes. Kansas does not levy local taxes on businesses, making your job easier.
Unemployment Taxes for Employers
In Kansas, all businesses are required to pay taxes under the State Unemployment Tax Act (SUTA). The current wage base is $14,000, with rates ranging from 0.10 to 7.60 percent. The standard rate for new employers who are not in the construction industry is 2.70 percent. The new business rate in the construction industry is 6.00 percent.
Businesses who pay SUTA in full and on time may be eligible for a tax credit of up to 5.4 percent on their FUTA taxes. FUTA is usually 6% of the first $7,000 in earnings for each employee.
Workers’ Compensation
If you pay out $20,000 in payroll per year in Kansas, you must have workers' compensation insurance. It protects your business if any of your staff are injured or sick on the job (or as a result of the job). You do not, however, need to carry it if your company is in the agriculture industry.
Income Taxes
Income Taxes 10 percent, 5.25 percent, and 5.70 percent are the three tax rates. If you're manually computing deduction amounts, you'll need to use the Kansas Tax Withholding Guide.
Kansas Minimum Wage
Kansas has a simple minimum pay of $7.25 per hour, which is the same as the federal minimum wage. Tipped employees must be paid at least $2.13 per hour if their gratuities bring them up to the hourly minimum wage. You'll have to pay the difference if it doesn't.
Overtime Calculation
Overtime in Kansas is governed by the Fair Labor Standards Act (FLSA), which requires all businesses to pay employees covered by the FLSA 1.5 times their usual hourly salary for hours worked above 40 in a workweek. Employers that are not covered by the FLSA must pay 1.5 times their regular hourly salary for any hours worked beyond 46 in a workweek, according to Kansas law.
Paying Employees
Employers must pay employees at least once per calendar month and on a regular basis, according to Kansas law. Kansas also allows you to pay your staff in a variety of ways:
- Payroll card
- a paper check
- a direct deposit
- Cash
Pay Stub Regulations
There is no Kansas law requiring employers to provide pay stubs to their employees. The employer must, however, give an itemized summary of deductions for each pay period if the employee asks one.
Deductions from Kansas Paychecks
Only limited deductions from an employee's paycheck are permitted in Kansas. The following are the only deductions that are permitted:
Deductions from Kansas Paychecks
Only limited deductions from an employee's paycheck are permitted in Kansas. The following are the only deductions that are permitted:
• Deductions for medical treatment
• Those required by state or federal law
• Employee-authorized deductions for a permissible purpose
• Contributions to a retirement plan
Certain deductions are also prohibited under the legislation. These are some of them:
• Insufficient funds
• Uniforms
• Tools
• Other goods required for employment
• Damage or loss of employer's property
Terminated Final Paychecks for Employees
Employees in Kansas are paid after their job relationship ends. Regardless of whether the employee departed voluntarily or not, you must pay them their final pay on the following regularly scheduled paycheck.
Human Resources Laws in Kansas That Affect Payroll
Kansas' human resources regulations are, for the most part, uncomplicated. However, paying close attention to the details can help ensure that your business remains compliant.
Kansas New Hire Reporting
Within 20 days of their first day of work, all employers must file form K-CNS 436 to report new hires. This document must include the employee's name, address, and Social Security number and is used to enforce child support obligations.
Breaks and Meals
Employers in Kansas are not required to offer employees with a meal break. As a result, federal requirements apply, mandating paid breaks of less than 20 minutes (if offered) and unpaid lunch breaks of 30 minutes or more.
Kansas Child Labor Laws
In Kansas, children must be at least 14 years old to work, with exceptions for paper routes, farm work, and performing. Child labor laws in the United States and Kansas prohibit minors under the age of 16 from working more than three hours each school day and 18 hours per week.
Children under the age of 16 are allowed to work up to eight hours per day on non-school days and 40 hours per week on non-school weeks. Except from June 1 to Labor Day, when hours are extended to 7 a.m. to 9 p.m., work hours must be between 7 a.m. and 7 p.m.
Requirements for time off and leave
Kansas follows federal law and has no state-specific leave restrictions.
The Family and Medical Leave Act is followed in Kansas (FMLA). Employers must provide up to 12 weeks of unpaid leave (meaning you don't have to pay the employee, but their employment must be preserved) to qualified employees for events such as the birth of a child, the care of an ailing family member, the adoption or foster care of a kid, and so on.
State legislation in Kansas does not allow for any further leave.
How to Run Payroll in Kansas?
Payroll processing in Kansas necessitates your undivided attention to avoid missing any procedures. Even minor blunders might cost you a lot of money. The following are the fundamental stages for processing payroll in Kansas.
Step 1: Set up your company as an employer. You may not have a Federal Employer Identification Number if your organisation is new (FEIN). This is a straightforward procedure that can be accomplished entirely online using the Electronic Federal Tax Payment System (EFTPS). To pay federal taxes, you'll need your FEIN.
Step 2: Register with the state of Kansas. If your company is brand new, you must register with the Kansas Secretary of State's Business Entity Formation website. The Kansas Department of Revenue requires any company that pays employees in Kansas to register. Kansas offers a Business One Stop website with information and connections to assist you in completing the steps necessary to register your business in Kansas.
Step 3: Make a payroll process for yourself. You'll have to make important decisions, such as how often you'll pay your staff and what type of payment you'll use. You'll also need to decide when and how you'll collect payroll forms, as well as how you'll handle payroll taxes.
Overall, you can choose to do payroll by hand, which is time consuming and not advised; create an Excel payroll template to ensure precise calculations; or hire a payroll provider to assist you with your Kansas payroll.
Step 4: Have staff complete the necessary paperwork. When your organization recruits new staff, you must gather specific forms. On their third day on the job, every employee must undergo I-9 verification.
A completed W-4 must also be on file for new employees. Employees in Kansas must additionally fill out Kansas Form K-4.
Step 5: Go over the time sheets and approve them. Payroll processing usually begins several days before the payroll deadline. Starting a few days early allows you to notice and fix any problems with your employees' time-sheets. You can use paper time sheets or free time and attendance software; either way, you'll need to double-check the time sheets for accuracy.
Step 6: Work out the gross compensation and taxes for each employee. From total hours worked and gross pay to total income taxes and benefits deductions, you'll need to do a lot of payroll math. Employers' tax calculations are usually the most complicated. There are three tax brackets in Kansas and no local taxes.
Step 7: Wages, benefits, and taxes must all be paid to employees. Direct deposit is used by the great majority of businesses and employees. However, you can also use cash or paper checks. Make sure you're paying your employees at least the Kansas minimum wage, which is $7.25 per hour, which is the same as the federal minimum wage.
You can pay both federal and state taxes online in Kansas. If you utilize a benefits provider, they should collaborate with you to make deductions as straightforward, automatic, and electronic as possible.
Step 8: Keep a copy of your payroll records. You should keep a copy of this document for at least several years, just like any other company record. Companies must maintain the following information for at least three years under Kansas law:
- Each employee's name and work title
- Payroll records for employees
- Each employee’s rate of pay, pay frequency, and time records
Step 9: Register with the federal and state governments to file payroll taxes.
All Kansas state taxes must be paid on time, usually quarterly, to the appropriate state agency, which you can do online at the Kansas Department of Revenue website. You can pay your federal taxes online using the EFTPS on one of the two schedules listed below:
- Monthly: If the IRS assigns you a monthly schedule, you must deposit employment taxes on payments made during the calendar month by the 15th of the next month.
- Semiweekly: If the IRS assigns you a semiweekly schedule, you must deposit employment taxes by the following Wednesday for payments made Wednesday, Thursday, and Friday, and by the following Friday for payments made Saturday, Sunday, Monday, and Tuesday.
Please keep in mind that the reporting and depositing of employment taxes are two different things. You must submit taxes quarterly on Form 941 or yearly on Form 944, regardless of your payment schedule.
Step 10: Finish your payroll reports for the year.
You'll need to file payroll reports every year, including all W-2 and 1099 forms. Employees and contractors must have these forms in their possession by January 31 of the following year.
Forms for Payroll
Payroll forms differ by state, and some, like Kansas, have their own W-4. Thankfully, that is the only one.
- K-4: Employee withholding form
Federal Payroll Forms
All the federal payroll forms you'll need are shown below, along with their locations.
- W-4 Form: Provides information on employee withholding so you can properly calculate and withhold federal and state income taxes
- W-2 Form: Used to report total annual wages for each employee
- W-3 Form: Used to report total annual wages for all employees
- Form 940: To calculate and report unemployment taxes due to the IRS
- Form 941: To file quarterly income tax
- Form 944: To file annual income tax
- 1099 Forms: Provides information for non-employee contract work
Account Numbers Needed
Companies that pay employees in Kansas must get a Withholding Account Number from the Kansas Department of Revenue and an Employer Serial Number from the Kansas Department of Labor.
0036-099999999F01 or 999-0999999Z99 (4/3 digits; 9 digits; 1 letter; 2 digits) KS Withholding Account Number
- Complete an online application at the DOR's Customer Service Center to receive a Withholding Account Number within 48 hours.
- Obtain an existing Withholding Account Number by completing Form KW-5, Withholding Tax Deposit Report, or contacting the Department of Revenue.
KS Employer Serial Number: 999999 or 9999999 (6 or 7 digits)
Complete the application online at the DOL's Kansas Employer portal to acquire an Employer Serial Number within two days.
Locate a current Employer Serial Number:
- by calling the DOL Required Payroll Documentation Withholding, on Form K-CNS 100, Quarterly Wage Report and Unemployment Tax Return, or o by contacting the DOL Required Payroll Documentation Withholding, on Form K-CNS 100, Quarterly Wage Report and Unemployment Tax Return
Required Payroll Documentation
Withholding
- KW-5 (Kansas Withholding Tax Deposit Report): Electronic filing is available. This report can be used to reconcile state tax withholding amounts from previous quarters.
Unemployment
- K-CNS 100 (Quarterly Wage Report and Unemployment Tax Return): This is an electronic-only return. This return is a useful tool for balancing employee gross salaries paid and employer contributions made in previous quarters.
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Key takeaways
- Payroll in Kansas is simpler than in many other states, and it generally follows federal criteria. There is only one form for each state, and there are no local payroll taxes.
- Employers in Kansas are required to withhold income taxes from employee paychecks in addition to paying unemployment taxes. Form K-4, Employee's Withholding Allowance Certificate, is filled out by employees and used to calculate withholding. There are no reciprocal agreements in place between Kansas and other states.
- Many forms, information on the most recent laws and regulations, and other employer-specific information are available from the Kansas Department of Revenue.
