Key figures
Vermont payroll
2026, with sources
Withholding and the Child Care Contribution
A Vermont employer registers with the Department of Taxes through myVTax for income tax withholding. Payment frequency generally mirrors the federal deposit schedule; monthly depositors pay by the 25th of the following month, and every employer reconciles quarterly on Form WHT-436 and annually on Form WHT-434.
Since July 1, 2024, the same account also carries the Child Care Contribution: a 0.44% payroll tax on all wages earned in Vermont, paid by the employer, which may withhold up to 25% of it (0.11%) from employees. It is remitted on the same schedule as withholding. For a company with $1 million of Vermont payroll, that is $4,400 a year, of which up to $1,100 can come from employees.
Unemployment insurance
The Department of Labor charges unemployment insurance on the first $15,400 of each employee’s wages in 2026, up from $14,800. Most new employers pay 1% from July 1, 2026, about $154 per employee, and stay on the new-employer rate for at least two years before earning an experience rating. Out-of-state construction corporations get industry-average rates instead.
Wages and paydays
Vermont adjusts its minimum wage every January 1. The 72-hour final pay rule after a discharge is the one founders most often miss: a termination on Friday needs an off-cycle paycheck by Monday. Vermont also has an earned sick time law; the Department of Labor publishes its accrual and use rules.
- Minimum wage: $14.42 an hour from January 1, 2026; tipped $7.21.
- Paydays: weekly, or bi-weekly or semi-monthly after written notice, within six days of the end of the pay period.
- Final pay: within 72 hours after a discharge; on the last regular payday after a quit.
Deadlines
- QuarterlyQuarterly withholding and Child Care Contribution reconciliationForm WHT-436
- Jan 31Annual reconciliation with W-2s and 1099sForm WHT-434
The federal baseline
This page covers what Vermont adds. The federal rules underneath it apply here too.
Common questions
What is the Vermont Child Care Contribution?
It is a 0.44% payroll tax on Vermont wages that has funded child care since July 1, 2024. The employer pays it and may withhold up to a quarter of it, 0.11%, from employees. It is remitted with Vermont withholding and reported on Form WHT-436.
Is there a mandatory paid family leave payroll tax in Vermont?
No. Vermont’s family and medical leave insurance is voluntary for private employers. The mandatory payroll items are income tax withholding, unemployment insurance and the Child Care Contribution.
Payroll next door
- MAMassachusetts payrollMassachusetts payroll runs through DOR, DUA and DFML: 5% withholding, a $15,000 UI wage base at 2.42% for new employers, PFML at 0.88% (0.46% under 25), and final pay on the last day.
- NHNew Hampshire payrollNew Hampshire doesn’t tax wages, so payroll is unemployment insurance with NHES, the federal minimum wage, weekly or biweekly paydays and final pay within 72 hours of a discharge.
- NYNew York payrollNew York payroll is state and city at once: one NYS-45 for withholding and UI, a disability and Paid Family Leave policy you buy from a carrier, the MCTMT in the commuter district, and NYC’s own leave law.
How Vermont compares
- No tax on wagesStates with no state income tax on wagesVermont: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programVermont: no state program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesVermont: state-level only. 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.
- RunwayBurn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
- EquityStock options, 409A valuations and vesting for startupsHow option strike prices are set by a 409A valuation, how vesting and the cliff work, and why ASC 718 makes every grant an expense on your P&L.
More of the Vermont guide
- AccountingAccounting and state tax in VermontCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in VermontSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in VermontPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in VermontRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in VermontCredits, 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.