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).
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 |
Other Taxes & Obligations
Vermont 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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