Montana paycheck laws: A Guide for Employers
Before providing pay stubs to employees and contractors in Montana, it' vital to grasp the relevant laws and regulations regarding pay stubs.
This guide aims to clarify the legal framework applicable to employers in Montana concerning payroll management and the issuance of pay stubs.
Pay stub regulations in Montana
1. Are pay stubs required by law in Montana?
Employers in Montana must provide their employees with pay stubs every payday.
2. How often do you need a pay stub in Montana?
You will need to pay your employees at least on a semimonthly basis. As pay stubs are mandatory in Montana, you will need to provide pay stubs every time you pay your employees.
3. What information can be included on a pay stub in Montana?
The following information can be included in employee pay stubs:
- Employee name and job title
- Employer name
- Pay rates
- Hours worked, if applicable
- Total taxes and deductions withheld
- Final net pay amount.
4. Does Montana have a state income tax?
Yes, state income taxes are applicable to employees in the state of Montana.
5. Are there any other taxes applicable to Montana?
No. There are no local taxes in addition to federal and state income taxes applicable to employees in the state of Montana.
Information needed to generate pay stubs
To provide employees with accurate pay stubs, the information below is required.
- Employee's exemption status from state withholding
- Total allowances and additional state withholding amount.
Montana wage and hour laws
In Montana, employers are required to comply with wage and hour regulations, ensuring that non-exempt employees receive minimum wage, appropriate compensation for overtime, adequate meal and rest breaks, and accrued paid time-off benefits.
These regulations encompass diverse aspects of employment law.
Montana Minimum wage
In Montana, businesses are legally obligated to ensure that workers receive at least the minimum hourly wage, adhering to statutory requirements. The minimum hourly wage rates vary based on the gross annual sales of the business:
- In 2024, businesses in Montana with gross annual sales exceeding $110,000 are subject to a basic minimum rate of $10.30 per hour.
- For businesses not covered by the Fair Labor Standards Act with gross annual sales of $110,000 or less, the basic minimum rate for 2024 is $4.00 per hour.
Businesses not subject to the federal Fair Labor Standards Act and with gross annual sales of $110,000 or less have the option to pay their employees $4.00 per hour. However, if an employee's work involves producing or transporting goods across state lines or falls under federal jurisdiction for other reasons, they must be paid either the federal minimum wage or Montana's minimum wage, whichever is higher.
Montana's minimum wage is adjusted annually using a predetermined formula.
Overtime pay
Unless exempt from overtime provisions, employees must receive compensation at one and a half times their regular hourly rate for all hours worked beyond 40 per week. In cases where employees perform various types of work with differing pay rates, overtime must be calculated based on a weighted average hourly rate.
Meal break and Rest break
No state or federal law requires employers to provide breaks (rest periods or coffee breaks) or meal periods. This is an optional benefit at the discretion of the employer. However, if breaks are provided, the time is considered paid. In the case of meal periods lasting half an hour or longer where employees are entirely relieved from duty, this time is unpaid.
Paid time off and leave
Montana employers are required to provide employees with various leave benefits, encompassing both mandatory and discretionary options.
| Required Leave | Non-Required leave |
|---|---|
| Unpaid | Paid or Unpaid |
| Montana Family and Medical Leave | Vacation leave |
| Jury duty leave | Bereavement leave |
| Military leave | Holiday leave |
| Voting leave | |
| Sick leave |
Montana State payroll taxes 2024
In Montana, payroll taxes are classified as:
- Montana Personal Income Tax(PIT)
- Montana State Unemployment Insurance (UI)
Montana Personal Income Tax(PIT)
For Tax Year 2024 in Montana, state personal income tax rates vary depending on an individual' filing status and income level. Filing statuses include Single, Married Filing Separately, Married Filing Jointly, and Head of Household.
The income tax rates for Montana in 2024 are structured across two brackets: 4.7% and 5.9%.
Montana State Unemployment Insurance (UI)
Montana's State Unemployment Tax Act (SUTA) was established to assist individuals experiencing unemployment by providing unemployment benefits. This legislation enables the state to collect the funds needed to distribute unemployment insurance benefits to eligible individuals facing periods of unemployment.
- In 2024, SUTA rates in Montana range from 0.00% to 6.12%.
- In 2024, the taxable wage base in Montana stands at $43,000.
Montana payroll tax filing
- Report of New hire Employees
- Report of New hire Independent Contractors
- Montana Personal income tax filing (Form 2)
- Montana Quarterly wage report (form UI-5)
Report of New hire Employees
Reports must be filed within twenty (20) days from the date of hiring or rehiring. If reports are submitted electronically, they must be spaced no less than 12 days and no more than 16 days apart.
Report of New hire Independent Contractors
Employers are not obligated to report the hiring of new independent contractors.
How to report employees' new hire in Montana?
Montana offers employers a range of reporting methods for submitting new hire information.
| Online | Fax | |
|---|---|---|
| Employees New Hire Report | Address Information: P.O. Box 8013 Helena, MT 59604 Email: NewHireReporting@mt.gov Direct Phone: 800-346-5437 Extension: 1133 Public Phone: 180-034-6543 Extension:4 | Fax 1: 888-272-1990 Fax 2: 406-444-0745 |
Montana Personal income tax filing (Form 2)
Individuals in Montana, whether filing as single, married filing jointly, or as head of household, and those opting for itemized deductions, must submit their Tax Year 2023 Individual Income Tax Returns using Form 2 by April 15, 2024.
Montana Quarterly wage report (form UI-5)
Employers are required to report wage information for their employees and pay associated taxes to the department on a quarterly basis. In case a due date falls on a weekend or holiday, the next business day serves as the deadline. Failure to submit tax payments or quarterly reports by the due date may result in penalties and interest assessed by the department. Employers with 19 or fewer employees have the option to file quarterly wage reports using either a UI-5 form provided or approved by the department, or an electronic format provided or approved by the department.
| Reporting Period | Due Date |
|---|---|
| Quarter 1 | April 30 |
| Quarter 2 | July 31 |
| Quarter 3 | October 31 |
| Quarter 4 | January 31 |
Have all the information handy?
With SecurePayStubs, you can calculate accurate federal and Montana state taxes for your employees and generate pay stubs securely.
Processing payroll manually is complex
As a business owner who runs payroll manually, you will need to keep up with ever-changing payroll laws. You already have a lot on your plate and you might not want to get into the complex process of pay stub generation.
Utilize SecurePayStubs, our efficient paystub generator, to swiftly generate pay stubs for both employees and independent contractors. Within just two minutes, you can produce accurate pay stubs inclusive of federal and Montana state taxes. Enter the basic employee and employer information, select a pay stub template for free, and let SecurePayStubs calculate the applicable payroll taxes accurately.
Spend less time generating pay stubs and more on your business growth.
This article has been updated from its original publication date of April 8, 2024.