For employers who pay employees in Maryland, use this guide to learn what’s required to start running payroll while keeping compliant with state payroll tax regulations. Without this information, OnPay will be unable to file or deposit any Maryland tax payments for your company. Any penalties and interest that accrue from missed tax payments will be your company’s responsibility.
Gusto can help you set up and manage your payroll cycles, track paid and unpaid sick leave and provide year-end W2 and 1099 tax reporting. Maryland provides a payment system called WebTax to make it easy for businesses who hire workers to pay their Maryland payroll taxes. Overtime is calculated the same in Maryland as in most states in the United States. After 40 hours of work within one week, the employee is paid overtime at a rate that’s 1.5 times their regular pay rate. However, Maryland provides some overtime exemptions, such as for administrative employees and seasonal workers.
- More than 700,000 transactions are made totaling over $200,000,000 each year.
- It provides new hire reporting and tax filing in compliance with state laws and can even offer consulting services if you have questions about Maryland payroll taxes.
- FIELD AUDITField Audit audits all business taxes administered by the Comptroller.
- The Board then sends to the Governor, for submission to the General Assembly, an itemized statement of estimated revenues for the current and next fiscal years.
- STATE LICENSE BUREAUThe State License Bureau administers and tracks 21 different business licenses issued by clerks of the courts.
Maryland Executive Commissions, Committees, Task Forces, & Advisory Boards
The office of the Comptroller of Maryland was established by the Constitution of 1851 (Art. VI, secs. 1-4). Delegates to the 1850 Constitutional Convention, concerned about the potential for fraud and corruption in the administration of the public treasury, established the office as a check on the State Treasurer. In contrast, the State Treasurer oversees the State Treasury, investing funds received by the State, issuing and redeeming bonds, and paying the obligations of State government. Whereas, the Comptroller (or deputies) countersigns all checks drawn by the State Treasurer upon the deposits of the State. The Comptroller also prescribes the formalities for transfer of other evidence of State debt and countersigns such papers. Trade practice regulations and revenue laws related to alcoholic beverages, tobacco, motor fuel, and sales use taxes are enforced by the Field Enforcement Division.
Operations
With a focus on accuracy and efficiency, the bureau ensures timely and correct payment to all state workers. The Payroll Online Service Center (POSC) allows employees to review and print online pay checks, year-to-date pay history and W-2s. Through the Bureau, the Comptroller controls, regulates, and issues licenses for the manufacture, sale, transportation, and distribution of alcoholic beverages and cigarettes into, within, and from Maryland. The Bureau also regulates advertising, promotional activities, and other trade practices in the alcohol and cigarette industries. The Information Technology Division began in 1967 as the Data Processing Division, and received its present name in July 1999.
- Some of these differences come into play based on how many employees you have.
- In fact, direct deposit is allowed in Maryland only if the employee authorizes it; a Maryland employer cannot require an employee to use direct deposit.
- For the Board of Revenue Estimates, the Bureau prepares an analysis of the State’s economic outlook, and the itemized statement of anticipated revenue.
- The bureau is currently complimented by three units including Operations, Accounting and Reporting and Information Technology.
- You should also include the employees’ hours worked as well as the pay period start and end dates.
Break-even point U S. Small Business Administration
More than 700,000 transactions are made totaling over $200,000,000 each year. Established in 1953, we handle and provide payment of salaries and wages for all state employees whose salaries are paid from funds appropriated by the General Assembly. The Alcohol and Tobacco Tax Bureau began in 1936 as the Alcoholic Beverages Division. It was consolidated with the Tobacco Tax Unit in 1975 as the Alcohol and Tobacco Tax Division.
OFFICE OF INFORMATION TECHNOLOGY STRATEGY & SERVICES
Agents and inspectors work together to regulate transient vendors and use-tax violators. Administration of the Abandoned Property and Dormant Bank Account Laws also is a responsibility of this office. Maryland requires employers to withhold state income tax from employees’ wages and remit the amounts withheld to the Comptroller of Division of Revenue. Wage deductions that are permissible in Maryland include court-ordered garnishments and federal, state and local taxes. If any non-exempt employees work more than 40 hours in a workweek, they may be entitled to overtime pay that’s 1.5 times their regularly hourly wage.
Accounting and Reporting
Maryland’s payroll and employment laws are some of the most stringent in the country. The state charges income tax, has a minimum wage rate that’s higher than the federal government and has laws governing shift breaks, leave and equal pay. Maryland expects employers to withhold state taxes ― in addition to federal income tax withholdings ― for their employees. State taxes range from 2% and 5.75%, depending on the earner’s income and filing status. In addition, 24 counties in Maryland have local tax rates as well; those range from .0175% and 3.2%. Maryland is stricter than other states which may defer to federal minimums ― specifically when it comes to minimum wage, break times, and employee leave.
You do this each pay period before you “run payroll” and process employee net pay onto a check. Payroll software typically allows you to view your numbers ― like total earnings and deductions ― before you finalize each payroll run. Payroll providers will require two sets of data to set up your payroll processing in Maryland. The first set of data is about your company and employees, such as your company name, information on your employees, and suggested payroll timeframes. Then, each payroll cycle they’ll need you to provide employee work hours and any changes like new hires, promotions, and terms.
To save time from entering employee work hours, consider using free time and attendance software like Homebase that uploads hours worked into Gusto each pay period. In addition, your payroll provider will need to know if anyone was promoted or received a pay rate change so that they can update that employee’s status and pay rate. In fact, direct deposit is allowed in Maryland only if the employee authorizes it; a Maryland employer cannot require an employee to use direct deposit. Further, if a payday falls on a holiday, you’re required to pay the employees on the last business day prior to that holiday date.
GENERAL ACCOUNTING DIVISION
In November 2008, registration and tax-processing functions formerly overseen by the Motor Fuel, Alcohol and Tobacco Tax Regulatory Division were assigned to the Revenue Administration Division. Now, the Division administers laws and regulations concerned with the manufacture, storage, transportaton, sale, and distribution of alcoholic beverages, tobacco, and motor fuel. ANNAPOLIS DATA CENTERThe Information Technology Division operates the largest computer center in Maryland State government – the Annapolis Data Center.
ADDRESS
Yet, the Comptroller must give a bond and keep the office at the seat of government. The Comptroller begins his duties on the third Monday in January following election. The Comptroller is elected by the voters to a term of four years (Const., Art. VI, sec. 1). Moreover, neither the Constitution nor the Annotated Code of Maryland specifies qualifications for this office.
The Division enforces the revenue laws relating to alcoholic beverages, business licenses, cigarettes, motor fuels, and sales and use tax. Division agents conduct investigations, arrest violators, collect unpaid taxes, issue citations, and perform inspections. From businesses that sell motor fuel, Division central payroll bureau compliance inspectors conduct field inspections and collect fuel samples. These inspectors also carry out business license inspections and routinely inspect establishments that sell alcoholic beverages.
In addition, they require pay stubs be provided and mandate equal pay for equal work across all employers, regardless of size. It may be helpful to view the examples below showing how payroll in Maryland is stricter than the federal government. Maryland requires small businesses, ranging from one to 14 employees, to provide their workers with unpaid sick leave.
If you don’t have it, contact your Agency’s Payroll Representative before attempting to create an account.
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