Paycheck Calculator Vermont - VT

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Vermont - VT Paycheck Calculator: Hourly and Salary

Vermont is a U.S. state full of natural landscape and adventure, known for its wooden bridges, maple syrup, thousands of acres of mountain and forest. This State is located in the northeastern region of the United States, sharing its borders with New Hampshire to the east, New York to the west, Massachusetts to the south, and the Canadian province of Quebec to the north.

Vermont, also known as The Green State, has Montpelier as its state's capital, while Burlington is its largest city, and Greater Burlington is the largest metro.

The state was on No. 1 spot to move to in 2018, and the primary reason for relocation was "job opportunities." Moreover, the Green State is overloaded with Jaw-dropping sceneries, affordable housing, tons of outdoor activities, and much more.

So if you are mulling over to relocate to Vermont for a new job, better scenery, or looking for a better business opportunity, Vermont can be your right choice.

Our travel and finance experts have joined hands to bring you one-of-its-kind Vermont Guide that covers the following topics:

  • The thing you must know before moving to Vermont
  • Vermont Payroll Facts
  • How to Calculate Paycheck in Vermont? – This section would benefit both employers and employees in the following ways:
    • Help job seekers to compare several job offers in terms of take-home pay and choose the best one.
    • Help entrepreneurs to compare different business opportunities in Vermont in terms of employment cost.
    • Help employees of Vermont to calculate their upcoming Paycheck amount for verifying and budgeting.
    • Help employers in Vermont to calculate Paycheck amounts for multiple employees instantly using our Vermont Paycheck Calculator.
  • Federal and Vermont Payroll Laws to ensure your paycheck complies with the law.
  • Frequently Asked Questions

We hope all these earlier mentioned topics would answer most of your queries, give you updates about the Vermont state, and eventually help you make a better decision that you won't regret later. So let's get started!


The Thing You Must Know Before Moving To Vermont

As you are considering a move to Vermont, the following are the factors you must know about the Green State, to ensure your decision is worth it!

Cost of Living

Living in Vermont is slightly cheaper than most of the states, with the cost of living index of 95.2, while the national cost of living index is 100 points. Lower Housing cost is the major factor followed by transportation that contributes to an overall lower cost of living. In contrast, factors like grocery, utilities, and health are significantly higher than the national average.

Cost of Housing

No doubt! Housing is one of the significant worries for anyone amid relocating to a new state or town. But don't worry! It is quite affordable in Vermont. The median home value in the state is $204,500, which is significantly lower than the national median home value of $231,200. You can also mortgage a house, as an average mortgage in the state is $1,233, while the average monthly rent is $1,612.

Moreover, if you are looking for the cheapest cities in Vermont, you can prefer moving to Enosburg Falls, Poultney, Newport, and St. Albans.

Outdoor Activities

Unfortunately, Vermont is a landlocked state so that you can't enjoy a coastal vibe. However, stunning lakes like Lake Champlain would still give you a seaside feel. Moreover, the active lifestyle, fantastic weather, plenty of outdoor places including national and state forests, parks and campgrounds, makes Vermont a great place for outdoor enthusiasts. You can enjoy hiking, skiing, snowboarding at places like Sugarbush Resort.

Additionally, the state also has numerous family-friendly attractions and tasty destinations to explore, including Ben & Jerry's Tour, Vermont Teddy Bear Factory, Shelburne Museum, Smugglers Notch State Park, and Cabot Creamery. Besides, you can also enjoy delicious food and drinks at spots like Lucky Buffet (St. Albans) and Ye Olde Tavern (Manchester). So no matter what you are looking for to make your weekends and vacations memorable, Vermont has it all.

Education

Vermont secures the third position among 50 states for best schools (by USAToday). Moreover, the state has the highest funding and 11th highest high-school graduation rate in the nation. So moving to this state isn't a bad idea for a bright future of your kids. The state also has quality institutions for higher education in colleges and universities.

Some of the best schools, colleges, and universities in the Green State include Middlebury College (Middlebury), University of Vermont (Burlington), Champlain Valley School District (Shelburne), and South Burlington School District (South Burlington).

Weather

You can enjoy four distinct seasons in Vermont, as it has a humid continental climate. However, winters can be exceptionally long and colder. So, in short, you will have colorful autumns, muddy springs, snowy winters, and warm & humid summers. Fortunately, the state ranks high in emergency preparedness, and the part of Top 10 US states safest from natural disasters.

Business and Job Opportunities

Vermont has a low population, a 2.8% unemployment rate, and the current minimum wage of $10.50/hour. It gives a ray of hope for job seekers to achieve ultimate success. Some of the fastest-growing jobs here are taxi drivers, personal care assistants, psychologists, and software developers. Moreover, the highest paying job in the Green State is surgeon, psychiatrist, and architect manager.

Vermont has a booming economy and a favorable environment for the entrepreneurs looking to start their business. They can really go for key industries, tech, manufacturing, energy, and agriculture to achieve their dream goals.


Pros and Cons

Here is the quick round-up of all the perks and drawbacks for moving to Vermont State:

Pros:
  • Jaw-dropping landscape
  • Country's healthiest state
  • Affordable housing
  • The charming and traditional approach to life
  • Less densely populated
  • No Billboards
  • Snowsports
  • Two hours' drive to Montreal, Canada
  • Friendly locals

Cons:
  • The higher cost of living
  • Less diversity
  • Harsh winters
  • Muddy spring season
  • Worst air pollution In winters

Vermont Payroll Facts

  • Vermont state levies Federal income tax from Employee's Paycheck at the rate ranging between 0% and 37%, sorted in seven tax brackets according to filing status and income level.
  • Both employers and employees pay FICA Tax that covers Social Security and Medicare Tax. Employees pay 6.2% of Social security tax on taxable wage up to $137,700 (in 2020), and 1.45% of Medicare tax on taxable wage up to $200,000 (in 2020). Moreover, the employer pays an equal amount of both taxes for each employee. However, if an employee's taxable wage exceeds the threshold of $200,000, then employee only is charged with 0.9% of the Additional Medicare surtax.
  • Only Vermont employers pay FUTA tax, which is 6% of the first $7,000 of each employee's taxable income. Moreover, they also pay State Unemployment Insurance (SUI) Tax, which ranges between 0.8% and 6.5%, on the first $16,100 (in 2020) in wages paid to each employee in a year. However, new employers only pay a flat rate of 1%. Fortunately, employers who pay SUI tax on time and in full can claim a tax credit of up to 5.4% of FUTA tax.
  • Vermont State levies State income tax from employee's paycheck, at the rate ranging from 3.35% to 8.75%, distributed in four tax brackets according to income level and filing status. Moreover, Supplemental wages and bonuses can be charged at the rate of 30% of the Federal Tax rate charged on an employee.
  • No city or county in Vermont charges any local income tax on its residents.
  • Vermont State doesn't have an income tax reciprocal agreement with any state, so non-residents employees are required to pay taxes in Vermont.
  • The federal minimum wage rate for non-exempted employees is $7.25 per hour, while the state minimum wage rate is $10.96 per hour. Moreover, the state's cash minimum wage for tipped employees is $5.48 per hour, with the maximum tip credit of $5.48 per hour.
  • Employers of Vermont pay overtime to their non-exempted employees at one and half times the employee's regular hourly rate for every hour over 40 hours in a workweek.
  • The livable wage for a single adult living in Vermont is $12.74, and for a couple (both working) with one child is $14.75, as reported by the Massachusetts Institute of Technology.
  • The Average male salary in Vermont is $59,839, and for females, it is $51,458, as reported by datausa.io.
  • The median household income in Vermont is $60,782, according to datausa.io.

Federal and Vermont Payroll Laws

  • Vermont Law requires employers to pay every week to their non-exempted employees. However, if the employer has given a notice to his/her employees, then an employer can pay on Semi-monthly or bi-weekly pay frequency. Moreover, payment shall be made within six days after the end of the pay period.
  • According to Vermont State Law, employers are required to pay at least the minimum wage rate of $$10.96 per hour worked (Effective 01/01/2020) to their employees unless or otherwise exempted. However, Tipped Employees are allowed to be paid a cash minimum wage rate of $5.48 per hour, with a maximum tip credit of $5.48 per hour.
  • The State law also requires the employers to pay overtime to their non-exempted employees at least the rate one and one-half times the regular wage rate for any hour worked by the employee in excess of 40 hours during a workweek. However, some industries are exempted from overtime law:
    • State and political subdivisions of the state;
    • Retail or service establishments;
    • Certain employees engaged in transportation;
    • Hotels, motels or restaurants;
    • Certain amusement or recreational establishments.
  • Employers exempted from overtime and minimum wage law includes:
    • Bonafide executive employees
    • Bonafide administrative employees
    • Bonafide professional employees
    • Outside salespersons
    • Agriculture workers
    • Taxicab drivers and a few more.
  • Vermont State requires the employers to provide a reasonable time for a lunch break and toilet break to their employees to protect their health and hygiene.
  • Employers in Vermont are not required by the law to provide either paid or unpaid vacation benefits, holiday leave, jury duty leave, bereavement leave, or voting leave. However, it requires employers to provide sick leave benefits.

How to calculate Paycheck in Vermont?

As you are aware of State Payroll Facts, let's head towards the steps that are involved in calculating Paycheck.


Step 1 - Calculating Gross Pay:

  1. To calculate Gross Pay, first, you need to determine the Pay Type of an employee. It is whether an employee is paid on an hourly basis or salary basis.

Hourly Employees:

Hourly Base Employees are paid for each hour they work in a day or a week, at the mutually agreed hourly rate. However, the 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 states is one and a half times the regular hourly rate.


Salaried Employees:

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.


  1. Remember, Supplementary Wages like bonuses, commissions, and paid leaves, as well as double time and fringe benefits, are also taxable wages. Therefore they must also be included in gross pay before federal and state tax calculation.

Step 2 – Subtracting Pre-Tax Deductions (If Any):

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 wages. 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:

  • Health Savings Accounts or FSA or HSA plans
  • Commuter Benefits
  • Healthcare Insurance
  • Short-Term Disability
  • Dental Insurance
  • Medical Expenses and Flexible Spending Accounts
  • Vision Benefits
  • Retirement funds like a traditional 401(k)

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.

Step 3 – Calculate and Subtract Federal Taxes:

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 range from 10% to 37% have seven tax brackets, depending on filing status, income, and the number of allowances claimed. Below is the income tax details for the year 2019:

Single Filers
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%

Married, Filing Jointly
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%

Married, Filing Separately
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%

Head of Household
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%


Step 4 – Deduct FICA Taxes:

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:


  1. Social Security:

Employers are entitled to withhold 6.2% from the first $137,700 (wage base limit for 2020), taxable wages earned by the employee. Moreover, the employer is also required to pay an equal amount to the IRS for each employee.


  1. Medicare:

Medicare tax is another type of FICA Tax that an employer must withhold from the employee paycheck, at the rate of 1.45% each employee's taxable wages, until they have earned $200,000 in a year. However, if the employee makes more than the $200,000 threshold, than he/she is subjected to an additional 0.9% of the 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.


Step 5 – Payment of FUTA Taxes

The Federal Unemployment Tax Act (FUTA) is a tax that the IRS requires the employer to pay without deducting anything from the employee's paycheck.

The FUTA Tax rate for 2020 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, then the employer no longer has 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.


Step 6 – Subtract Post-Tax Deductions (If any):

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.


Step 7 – Withhold Vermont State Payroll Taxes:

As we have calculated Federal Payroll taxes, now it's time to calculate Vermont State Payroll Taxes. The State requires the employers to pay some taxes themselves and rest to withhold from the employee's paycheck. Following are the State payroll taxes that usually most of the employers and employees pay:


Vermont State Income Tax

The state requires the employer to withhold the Vermont State income tax from the employee's paycheck, according to the details provided by the employee on Form W-4VT, which contain all the necessary information of the employee such as filing status, a number of allowances to claim, number of jobs, etc. This form is filled by the employee at the starting of the job. The employee must ensure that the form is updated regularly when any significant event occurs like marriage, divorce, or child's birth.

The Vermont state income tax is divided into four tax brackets, ranging from 3.35% to 8.75%, depending on income level and filing status. Moreover, Supplemental wages and bonuses are charged at 30% of federal income tax, depending on the federal rate charged on the employee.

Single Filers
Vermont Taxable Income Rate
$0 - $39,600 3.35%
$39,600 - $96,000 6.60%
$96,000 - $200,200 7.60%
$200,200+ 8.75%

Married, Filing Jointly
Vermont Taxable Income Rate
$0 - $66,150 3.35%
$66,150 - $159,950 6.60%
$159,950 - $243,750 7.60%
$243,750+ 8.75%

Married, Filing Separately
Vermont Taxable Income Rate
$0 - $33,075 3.35%
$33,075 - $79,975 6.60%
$79,975 - $121,875 7.60%
$121,875+ 8.75%

Head of Household
Vermont Taxable Income Rate
$0 - $53,100 3.35%
$53,100 - $137,050 6.60%
$137,050 - $221,950 7.60%
$221,950+ 8.75%


Note: Employees are suggested to study and deduce the optimal number of Allowances to claim from Vermont State tax, as these allowances can significantly affect your take-home pay. Remember choosing more than requires a number of allowances may lead to underpayment of taxes that may lead to a penalty. On the other hand, choosing less than the required number of allowances will cause your paycheck amount to reduce, as you will be lending tax-free money to the state for a whole year.

State Unemployment Insurance (SUI) Tax:

Besides, State income tax, Vermont State also entitles the employers to pay State Unemployment Insurance (SUI) Tax at the rate range from 0.8% to 6.5% on the first $16,100 earned by each of their employees. However, New Employers are given relief to pay a lower flat rate of 1% on wages earned by each employee.


Step 8 – Withhold Local Tax:

Fortunately, No city or county in Vermont levies Local Income tax.


Step 9 – Calculate Pay Check:

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.

Also Check: Vermont Sales and Reverse Sales tax Calculator to Calculate the amount of tax included in a gross price as well as the amount you should add to a net price.

FAQs

Answer: Following are the type of payroll taxes and their rates deducted from an employee's paycheck while working in Vermont:

  • Federal Income Tax: This tax is withheld at the rate of 10% to 37%, distributed in seven tax brackets according to filing status and income level.
  • FICA – Social Security: This tax is charged at the rate of 6.2% of employee's taxable wages reach total earnings of $137,700 for 2020.
  • FICA – Medicare: This tax is charged at the rate of 1.45% until the employee's taxable wage reaches total earnings of $200,000 for 2020.
  • FICA – Additional Medicare Surtax: It is charged at the rate of 0.9% if the employee's taxable wage exceeds the threshold of $200,000 for 2020.
  • State Income Tax: This tax is withheld at progressive rates ranging between 35% and 8.75%, distributed in four tax brackets according to income level and filing status. Moreover, Supplemental wages and bonuses are charged at 30% of federal income tax, depending on the federal rate charged on an employee.

Answer: The state income tax withheld from employee's paycheck in Vermont is withheld according to the following tax brackets:

For "Single" and "Married but filing separately":

  • 35% on taxable income between $0 and $39,600
  • 60% on taxable income between $39,601 and $96,000
  • 60% on taxable income between $96,001 and $200,200
  • 75% taxable income over $200,200

For "Head of household" and "married filing jointly":

  • 35% on taxable income between $0 and $66,150
  • 60% on taxable income between $66,150 and $159,950
  • 60% on taxable income between $159,950 and $243,750
  • 75% taxable income over $243,750

Answer: The Average male salary in Vermont is $59,839, and for females, it is $51,458, as reported by datausa.io.

Answer: The state minimum wage rate is $10.96 per hour. Moreover, the state's cash minimum wage for tipped employees is $5.48 per hour, with the maximum tip credit of $5.48 per hour.

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