Overview
North Dakota has one of the lowest state income tax rates in the nation and uses the federal W-4 as the basis for state withholding. The state has two calculation methods depending on which version of the federal W-4 the employee completed (pre-2020 vs. 2020 and later).
State Income Tax (SIT)
North Dakota’s progressive income tax has very low rates, making it one of the least burdensome income tax states. The state uses the federal W-4 directly, with two calculation methods: one for employees who completed a pre-2020 W-4 and one for those using the 2020 or later version. This distinction affects how allowances vs. deductions are factored into the calculation.
| Tax Structure | Progressive with very low rates |
| State Withholding Form | Uses federal W-4 |
| Supplemental Rate | 1.5% |
| W-4 Versions | Separate calculation methods for pre-2020 vs. 2020+ W-4 |
| SUTA Rate | 1.02% default for new employers |
Supplemental Wages
North Dakota supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 1.5%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 1.02%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 1.02% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
North Dakota does not currently impose significant additional state-level payroll taxes beyond SIT and SUTA. This keeps payroll relatively streamlined compared to states with multiple layers of tax obligations.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to:
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