West Virginia Payroll Compliance Guide 2026

West Virginia's payroll landscape changed meaningfully in 2023 when the Legislature passed HB 2526, one of the largest income tax cuts in the state's history. The top marginal rate dropped from 6.5% to 5.12%, and rates across all brackets were reduced. Employers who had been withholding under the prior rate schedule needed to update payroll tables immediately, and employees saw smaller withholding amounts in their paychecks beginning in 2023.

Beyond the income tax reform, West Virginia's payroll profile is relatively simple. The SUI wage base of $9,000 is low. There is no state PFL or SDI. The minimum wage sits at $8.75/hr, modestly above the federal floor. For employers coming from high-complexity states, West Virginia payroll involves far fewer moving parts.

West Virginia Payroll Obligations at a Glance

State Unemployment Insurance (SUI)

West Virginia's SUI program is administered by the West Virginia Bureau of Employment Programs (BEP). SUI is an employer-paid tax. West Virginia employees do not contribute to state unemployment insurance.

SUI Rates for 2026

• New employer rate: 2.7% until an experience rating is established
• Experienced employer range: 1.5% to 8.5%, assigned annually by BEP
• Taxable wage base: $9,000 per employee per calendar year
• Maximum annual SUI cost per employee (at 8.5%): $765
• New employer annual cost per employee (at 2.7%): $243

West Virginia's experience rating system uses a reserve ratio approach. Employers who pay premiums consistently without generating substantial unemployment claims build a positive reserve and earn lower rates. The BEP sends rate notices before the start of each calendar year. Confirm your assigned rate before your first quarterly deposit.

FUTA Credit and West Virginia SUI

West Virginia employers who pay SUI on time receive the standard 5.4% FUTA credit, reducing the effective FUTA rate to 0.6% on the first $7,000 per employee. West Virginia has generally maintained a solvent trust fund. Verify the credit status annually with the IRS FUTA credit reduction list published each November.

State Income Tax: The 2023 HB 2526 Reform

West Virginia's income tax history took a significant turn in 2023 when Governor Jim Justice signed HB 2526, which enacted the largest personal income tax reduction in West Virginia's history. The bill reduced the top marginal rate from 6.5% to 5.12% and cut rates across all brackets, effective tax year 2023.

West Virginia Income Tax Brackets (2026)

The reduction was phased in over multiple years. Employers must use current-year withholding tables published by the West Virginia State Tax Department. Do not rely on tables from before 2023 — using the pre-reform rates will cause over-withholding, which employees will notice and which can create W-2 reconciliation issues.

Withholding Mechanics and Form WV/IT-104

West Virginia's employee withholding form is Form WV/IT-104 (West Virginia Employee's Withholding Exemption Certificate). New employees complete this form at hire. It captures filing status, exemptions, additional withholding elections, and exemption claims.

• Personal exemption: $2,000 per exemption reduces annual taxable income for withholding purposes
• Additional withholding: Employees may elect a flat additional dollar amount per pay period
• Exemption from withholding: Available to employees with no WV tax liability in the prior year and no expected liability in the current year

If an employee does not submit a WV/IT-104, withhold as if single with zero exemptions — the maximum withholding position.

No Local Income Taxes

West Virginia has no local income taxes. Employers operate with a single state withholding account for all West Virginia employees regardless of work location within the state.

Minimum Wage in West Virginia 2026 — $8.75/hr

West Virginia Code § 21-5C-2 sets the state minimum wage at $8.75 per hour, which is above the federal floor of $7.25. This rate applies to employers subject to West Virginia minimum wage law. The state has not enacted automatic CPI indexing, so any future increases require legislative action.

Coverage Under West Virginia Minimum Wage Law

West Virginia's minimum wage law generally applies to employers with 6 or more employees at one location. Employers below this threshold may technically default to the federal FLSA rate ($7.25/hr) for employees not covered by the FLSA. In practice, most West Virginia employers meet FLSA coverage thresholds independently, making the $8.75 state rate the applicable floor for most employers regardless of size.

Tipped Employees

West Virginia follows federal FLSA tip credit rules for covered employers. Tipped employees may receive as little as $2.62 per hour in direct wages (70% of the federal tipped minimum) provided tips bring total hourly compensation to at least $8.75. If tips fall short in any workweek, the employer must make up the difference.

Overtime Rules

West Virginia follows federal FLSA overtime requirements. Non-exempt employees must receive at least 1.5 times the regular rate for hours over 40 in a workweek. West Virginia has no state-level overtime law that expands on FLSA. The exempt salary basis minimum is the federal FLSA threshold of $684/week.

Pay Frequency and Final Paycheck Rules

Pay Frequency

West Virginia Code § 21-5-3 requires that employers pay wages at least every two weeks (bi-weekly) or semi-monthly. The specific requirement depends on the employment arrangement and whether wages are paid on an hourly, salary, or other basis. The standard requirement for most employers is payment at intervals not exceeding two weeks or twice per month.

Employers must establish regular paydays in advance and notify employees of their payday schedule. Changes to the pay schedule require advance notice.

Final Paycheck Rule

Under West Virginia Code § 21-5-4, a departing employee's final wages must be paid no later than the next regular payday following separation. This applies equally to voluntary resignations and employer-initiated terminations.

No State Paid Family Leave

West Virginia has no state paid family leave (PFL) program and no state disability insurance (SDI) fund. There are no West Virginia payroll deductions for PFL or SDI.

West Virginia employers with 50 or more employees within a 75-mile radius must comply with the federal FMLA, providing up to 12 weeks of unpaid, job-protected leave per year for qualifying family and medical reasons. Smaller employers have no mandatory leave obligation beyond what they choose to offer voluntarily.

New Hire Reporting

West Virginia employers must report all new hires and rehires to the West Virginia New Hire Reporting Center within 14 days of the employee's first day of work. West Virginia's 14-day window is shorter than the federal 20-day requirement. The report must include the employee's name, address, and Social Security number, date of hire, and the employer's name, address, and federal EIN.

Reports can be submitted online at wvnewhire.com, by mail, or by fax. Employers with 25 or more employees must file electronically.

Employer Registration in West Virginia

West Virginia State Tax Department — Withholding Account

Register for West Virginia income tax withholding through the WV State Tax Department at tax.wv.gov. Online registration with your federal EIN. You receive a West Virginia account number and are assigned a deposit schedule based on withholding volume.

West Virginia Bureau of Employment Programs — SUI Account

Register for unemployment insurance at workforcewv.org. Online employer registration with your federal EIN. You receive a West Virginia employer account number and initial 2.7% SUI rate.

Workers Compensation

West Virginia requires workers compensation coverage for most employers with one or more employees. Coverage is obtained through licensed private carriers or the BrickStreet Insurance (formerly the state fund, now privatized). Sole proprietors with no employees are generally exempt but may elect coverage.

Filing Schedules and Deadlines

State Withholding — West Virginia IT-101

West Virginia withholding returns are filed using Form IT-101 (quarterly or monthly). The WV State Tax Department assigns your deposit frequency based on withholding volume:

Quarterly Deadlines (IT-101)

SUI — BEP Quarterly Wage Report

West Virginia SUI is reported quarterly through the BEP employer portal at workforcewv.org. Per-employee wage detail is required. Same quarterly due dates as withholding. Electronic filing is required for employers with 25 or more employees.

Annual W-2 Filing

West Virginia W-2s must be distributed to employees and filed with the WV State Tax Department by January 31. Employers with 25 or more W-2s must file electronically. W-2s must reflect West Virginia withholding and the WV account number.

Federal Payroll Taxes

West Virginia state payroll taxes are in addition to federal obligations:

• Social Security (OASDI): 6.2% employer + 6.2% employee on wages up to $176,100 (2026)
• Medicare: 1.45% employer + 1.45% employee on all wages (plus 0.9% Additional Medicare Tax on wages over $200,000)
• FUTA: 6.0% on first $7,000, reduced to 0.6% with the full state UI credit
• Federal income tax withholding: Based on the employee's W-4 elections
• Form 941: Quarterly federal payroll tax return due April 30, July 31, October 31, and January 31

Frequently Asked Questions

What is West Virginia's SUI rate for new employers in 2026?

New West Virginia employers pay 2.7% on the first $9,000 per employee per year. Maximum annual cost at 2.7%: $243 per new employee. Experienced employers receive BEP-assigned rates between 1.5% and 8.5% based on their unemployment claims history.

What are West Virginia's income tax rates in 2026?

West Virginia uses five graduated brackets post-HB 2526: 2.36% (first $10,000) through 5.12% (over $60,000). This is a significant reduction from the prior top rate of 6.5%. Employers must use current withholding tables from the WV State Tax Department, not pre-2023 tables.

What is West Virginia's minimum wage in 2026?

West Virginia's minimum wage is $8.75 per hour, above the federal $7.25 floor. The state minimum applies to employers with 6 or more employees at one location; smaller employers default to the FLSA rate. The tipped cash wage minimum is $2.62/hr with tips making up the difference to $8.75.

What was HB 2526?

West Virginia HB 2526, enacted in 2023, reduced the state income tax rates across all brackets. The top rate dropped from 6.5% to 5.12%. The reform took effect for the 2023 tax year. Employers must use updated withholding tables reflecting these lower rates — using pre-reform tables results in over-withholding.

When must West Virginia employers issue a final paycheck?

By the next regular payday following the last day of work. Violations of the WV Wage Payment and Collection Act can trigger penalties of 3 times the unpaid wages for willful violations, plus attorney fees. Pay on time and document the date issued.

Does West Virginia have paid family leave?

No. West Virginia has no state PFL or SDI program. Federal FMLA provides 12 weeks of unpaid, job-protected leave for eligible employees at covered employers (50+ employees). No West Virginia payroll deductions for PFL are required.