Use our free Delaware paycheck calculator to determine your net pay or take-home pay using your period or annual income and the necessary federal, state, and local W4 information. The state has seven tax levels, with a top income tax rate of 6.60%.
Delaware, also known as "First State", is a long and thin state, located at the "estuary" of Delaware River and the Atlantic Ocean. This State has plenty of beaches, coves and bays to explore, with a fantastic climate, nightlife, quality of schooling, low taxes and massive job opportunities, giving you numerous reasons to settle in here.
This diamond state is considered one of the most desirable places in the nation to live and work, due to its cost of living, which is significantly lower than its majority of states in the Eastern Coast. Moreover, it is also denoted as a tax haven, due to lower tax burden onto its residents, compared to the rest of the nation.
However, denoting it as tax heaven doesn't mean that its residents are free from all taxes. In fact, they are required to pay several taxes, including payroll tax like state income tax.
There are seven tax brackets for State income tax, ranging from 0 to 6.6%, in addition to local tax, in one of the cities in the state.
So, if you are planning to move to Delaware, and start a new life, business or job, then you must know, how much you are going to pay in a paycheck as an employer or earn as an employee.
As you know, Paycheck Calculation isn't as simple as it sounds. In fact, you have to deal with numerous elements and laws, for the correct determination of take-home pay. Therefore, our experts have created an excellent Delaware Paycheck Calculator along with a fantastic guide, to provide you with a perfect, instant and effective payroll solution.
To calculate Take Home Pay or Paycheck, you need to go through several steps that include calculation of Gross Pay, Pre-Tax Deductions, Federal Taxes, State Taxes, Post Tax Deductions, Local Tax, etc.
To make it easy for you, we have divided this guide into steps, which would give a general idea. However, there may be some differences or additional taxes that you may be subjected to, according to your situation. As it's a comprehensive guide, we can only discuss general aspects.
Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, mutually agreed hourly rate must be as per the Federal and State Minimum Wage law.
Hourly Employees are also entitled to receive overtime, for each excess hours worked after Regular worked hours in a day or week. The overtime rate in most of the state is one and a half time the regular hourly rate.
Salaried employees receive a fixed but mutually agreed on pay, for a decided pay frequency, usually semi-monthly or monthly. However, for gross payment determination for a pay period, the annual salary is divided by the pay frequency.
Most of the salaried employees are exempted from Overtime law. Therefore, they are not entitled to receive overtime, regardless of how many excess hours they work. However, some exceptional salaried employees may be eligible to receive overtime according to federal or state law.
Note:
Pre-Tax Deduction is an amount, deducted from employee's gross pay before any withholding tax is deducted. These deductions have several advantages, including the reduction of taxable wage. Hence, increasing the take-home pay of an employee. However, not all deductions can be considered as free from all taxes, which means some of the deductions may require certain taxes to be withheld.
Some of the standard Pre-tax deductions are:
Note: Pre-Tax deduction rate changes from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before, making any deductions.
Federal Taxes are taxes deducted from almost every employee, regardless of which state or county they work in.
Federal Taxes are calculated according to the details provided by the employee on Form W-4, which comprises of Income, filing status, number of dependents, number of allowances, number of jobs, etc.
The details are form W-4, are assessed and used by the employer to deduce the federal tax bracket, in which the employee's taxable wage lay upon.
Federal Taxes ranges from 0% to 37% have seven tax brackets, depending on filing status, income and number of allowances claimed. Below is the income tax details for the year 2024:
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $19,400 | 10% |
$19,400 - $78,950 | 12% |
$78,950 - $168,400 | 22% |
$168,400 - $321,450 | 24% |
$321,450 - $408,200 | 32% |
$408,200 - $612,350 | 35% |
$612,350+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $9,700 | 10% |
$9,700 - $39,475 | 12% |
$39,475 - $84,200 | 22% |
$84,200 - $160,725 | 24% |
$160,725 - $204,100 | 32% |
$204,100 - $306,175 | 35% |
$306,175+ | 37% |
Taxable Income | Rate |
---|---|
$0 - $13,850 | 10% |
$13,850 - $52,850 | 12% |
$52,850 - $84,200 | 22% |
$84,200 - $160,700 | 24% |
$160,700 - $204,100 | 32% |
$204,100 - $510,300 | 35% |
$510,300+ | 37% |
Along with Federal Withholding, employers are also required to withhold Federal Insurance Contributions Act (FICA) taxes from the employee's paycheck as well as pay a matching amount themselves to the IRS.
There are two types of FICA taxes:
Employers are entitled to withhold 6.2% from the first $132,900 , taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.
Medicare tax is another type of FICA Tax that an employer must withhold from the taxable gross wage of the employee, at the rate of 1.45%. Unlike social security, there is no wage base limit. However, if the employee earns more than the defined threshold than he/she is subjected to an additional 0.9% of Additional Medicare Tax rate, for every dollar earned above the threshold amount.
Like Social Security, IRS also requires the employer to pay an equal amount of Medicare tax for each employee.
The Federal Unemployment Tax Act (FUTA) is a tax, that IRS requires the employer to pay, without deducting anything from the employee's paycheck.
The FUTA Tax rate is 6.0% of the first taxable wage up to $7000 of an employee. However, once the taxable wage limit is crossed for a particular employee than the employer no longer have to pay this tax.
What to reduce FUTA Tax?
Yes! Then you must pay State Unemployment Insurance (SUI) tax in full and on time and get a FUTA tax credit of up to 5.4%. Which means, you saved a whopping 90% from FUTA Tax.
Although, employers are not required to withhold any amount as a post-tax deduction, unless if an employee voluntarily asks to do so. However, there are some deductions, ordered by the court like child support or wage garnishment, which the employer is entitled to deduct.
Once you are done with federal taxes, Delaware State also requires the employer to withhold a portion from employee's gross wage as State Income Tax.
Delaware State charges the progressive income tax rates having seven tax brackets that range from 0% to 6.6%, depending on the income. However, unlike most of the states, Delaware income tax rates are not dependent on filing status.
Delaware Taxable Income | Rate |
---|---|
$0 - $2,000 | 0.00% |
$2,000 - $5,000 | 2.20% |
$5,000 - $10,000 | 3.90% |
$10,000 - $20,000 | 4.80% |
$20,000 - $25,000 | 5.20% |
$25,000 - $60,000 | 5.55% |
$60,000+ | 6.60% |
Only Wilmington City in Delaware requires the employer to withhold a flat rate of 1.25% as local tax, from the employee's paycheck, who are working or earning from this city.
Like FUTA tax by IRS, Delaware State also entitles the employer to pay SUI Tax. The employer must only pay this tax. This tax has a wage base of $16,500 and ranges from 0.3% to 8.2%. However, the new employers get a little relief, as they only have to pay a flat rate of 1.5%. Moreover, Delaware State gives an exception to a new employer in the construction industry to pay a flat rate of 2.5%.
Note: As we have stated earlier, that paying SUI taxes in full and on time, can get the employer, a FUTA tax credit of up to 5.4%, that an employer should avail.
Once you are done with all elements (steps) discussed earlier, you will have a net pay amount for each employee. Now all you have to do is pay employees on time. Also, to file all Federal Taxes, State Taxes, FICA and FUTA taxes on time, to avoid any penalties.
Answer: Following are the taxes taken out of a paycheck of employee working or earning from Delaware:
Answer: The Delaware State Income Tax rate has seven tax brackets, ranging from 0% to 6.6%, depending on tax-payers income, regardless of filing status.
https://smartasset.com/taxes/delaware-paycheck-calculator#delaware/overall
Answer: Delaware is known as Tax Heaven, due to no Sales tax and gross receipts tax. However, Delaware residents are subjected to several taxes including Federal, State and local payroll taxes.
Answer: Yes, only Wilmington City in Delaware, have local taxes, at a flat rate of 1.25% on employee's payroll.
Answer: No, the Delaware State does not have any Reciprocal Agreements on the subject of taxation of non-resident employees, with any other state.