Overview
Vermont uses a progressive income tax with a unique supplemental rate—it’s calculated as 30% of the federal supplemental withholding rate rather than a fixed state percentage. The state has its own withholding form (Form W-4VT).
What Makes Vermont Unique: Vermont has a progressive income tax with a top rate of 8.75% and requires employees to complete Form W-4VT. Vermont also has mandatory employer assessments for healthcare and workers’ compensation.
State Income Tax (SIT)
Vermont’s progressive income tax features multiple brackets. For 2026, each personal allowance is worth $5,400 and there is no standard deduction. The supplemental rate is uniquely defined as 30% of the federal supplemental withholding rate, which can change when federal rates are adjusted. Vermont also has provisions for nonresident employees.
| Tax Structure | Progressive with multiple brackets |
| State Withholding Form | Form W-4VT |
| Filing Statuses | S, M, MH |
| Allowance Value | $5,400 per allowance |
| Supplemental Rate | 30% of federal supplemental rate |
Setup Note: Vermont does not use a standard deduction.
Supplemental Wages
Vermont supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 30% of federal supplemental rate.
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 1.0%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 1.0% |
| Rate Assignment | Experience-rated; assigned annually by the state |
How to Set Up Vermont Payroll Withholding
Follow these steps to begin withholding Vermont payroll taxes for your employees:
- Obtain your Federal EIN at irs.gov
- Register with the Vermont Department of Taxes at tax.vermont.gov
- Register for SUTA with the Vermont Department of Labor at labor.vermont.gov
- Submit a Netchex tax team request to enable Vermont SIT and SUTA
- Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
- Configure any additional tax settings in the employee profile
Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Vermont payroll taxes on your behalf.
Vermont Payroll Tax Filing Deadlines
The following are general filing and deposit deadlines for Vermont payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Vermont Department of Taxes.
| Tax | Deposit Frequency | Typical Due Date |
| SIT Withholding | Monthly or Semi-monthly | 25th of following month (monthly) |
| Annual Reconciliation (WHT-434) | Annual | January 31 |
| SUTA | Quarterly | April 30, July 31, Oct 31, Jan 31 |
| SUTA | Quarterly | April 30, July 31, Oct 31, Jan 31 |
Note: Deadlines are subject to change. Always confirm current requirements directly with Vermont Department of Taxes at https://tax.vermont.gov/business-and-corp/withholding-tax.
Resources & Links
The following official resources will help you stay current on Vermont payroll tax requirements:
Frequently Asked Questions: Vermont Payroll Taxes
What form do Vermont employees complete?
Employees complete Vermont Form W-4VT, the Employee’s Withholding Allowance Certificate.
What is Vermont’s top income tax rate?
Vermont’s top marginal income tax rate is 8.75%.
What is Vermont’s SUTA wage base?
Vermont’s SUTA wage base is $14,100 per employee per year. Verify at labor.vermont.gov.
Does Vermont have local payroll taxes?
No. Vermont does not impose local payroll taxes.
What is Vermont’s supplemental withholding rate?
Vermont uses a flat supplemental rate of 7.6%.
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.
Let Netchex Handle the Complexity
Staying compliant with payroll taxes doesn’t have to be stressful. Netchex automatically calculates, withholds, and files your payroll taxes so you can focus on what matters most — your people.
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