Key figures
Delaware payroll
2026, with sources
Registrations for the first Delaware employee
A company with an employee working in Delaware registers for withholding with the Division of Revenue and for unemployment insurance with the Department of Labor, which issues the SUI account number. For 2026 the taxable wage base is $14,500 and the new-employer rate is 1.0%. Quarterly UI reports and payments use Forms UC-8 and UC-8A.
Delaware’s income tax runs to a top rate of 6.6%. The annual WTH-REC reconciliation, filed with the W-2s, is due January 31.
Delaware Paid Leave
Delaware’s paid family and medical leave program started taking contributions on January 1, 2025 and paying benefits on January 1, 2026, up to $900 a week. Coverage depends on headcount: 25 or more employees means all three leave types and 0.8% of wages; 10 to 24 means parental leave only, at 0.32%; nine or fewer is exempt. Employers can deduct up to half of the contribution from employees.
Employers file a quarterly Hours & Wage Report through the Department of Labor’s system and may use an approved private plan instead of the state plan.
For a sense of scale: at 0.8%, an employee earning $100,000 generates $800 a year in contributions, of which the employer may deduct up to $400 from the employee. Unemployment insurance at the 2026 new-employer rate is 1.0% of the first $14,500, or $145 per employee per year.
Wages, timing and Wilmington
Delaware’s only local income tax is Wilmington’s. A company with an office in Wilmington withholds the city’s 1.25% wage tax from employees who work there and from Wilmington residents, and pays the city’s head tax on its headcount there above five.
- Minimum wage $15.00 an hour.
- Pay at least monthly, within seven days of the end of the pay period.
- New hires reported within 20 days of the start date.
- Wilmington: 1.25% wage tax on residents and on nonresidents working in the city.
- Wilmington head tax: $15 a month per employee over five.
Deadlines
- Within 20 days of start dateReport each new hire to the Delaware State Directory of New Hires
- Jan 31Annual withholding reconciliation with W-2sWTH-REC
- QuarterlyDelaware Paid Leave Hours & Wage Report and contributions
The federal baseline
This page covers what Delaware adds. The federal rules underneath it apply here too.
Common questions
Do we owe Delaware Paid Leave with a small team?
It depends on headcount. Employers with 25 or more employees contribute 0.8% of wages (medical 0.4%, family caregiving 0.08%, parental 0.32%) for 2025 and 2026. Employers with 10 to 24 contribute only the 0.32% parental component. Employers with nine or fewer are exempt but can join voluntarily. Up to half can be deducted from employees.
Is there a local tax in Delaware?
Yes, if the employee lives in Wilmington or works in the city. Wilmington levies a 1.25% tax on earned income, which the employer withholds, and a $15-a-month head tax for each employee over five that a licensed business employs in the city.
Will the minimum wage rise in 2027?
No. Delaware’s minimum wage is $15.00 an hour, set on January 1, 2025 as the last step of the 2021 law, and it is not indexed to inflation. It changes only if the legislature acts or the federal minimum rises above it.
Payroll next door
- MDMaryland payrollMaryland payroll withholds state and county income tax, pays unemployment on the first $8,500, and adds FAMLI contributions of 0.9% from January 1, 2027. Montgomery and Howard counties set their own minimum wages.
- NJNew Jersey payrollNew Jersey runs its own disability and family leave insurance through payroll: in 2026 employees pay 0.19% TDI and 0.23% FLI up to $171,100, and the UI wage base is $44,800. Jersey City and Newark add a 1% employer payroll tax.
- PAPennsylvania payrollPennsylvania’s state payroll is light: 3.07% flat withholding and UC on the first $10,000. The work is local: earned income tax under Act 32, the Local Services Tax, and Philadelphia’s 3.735% Wage Tax.
How Delaware compares
- No tax on wagesStates with no state income tax on wagesDelaware: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programDelaware: state paid leave or disability program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesDelaware: city, county or district taxes on wages. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the Delaware guide
- AccountingAccounting and state tax in DelawareCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in DelawareSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in DelawarePaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in DelawareRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in DelawareCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.