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Taxes
Minnesota Payroll Taxes 2026: Complete Overview for Employers
Minnesota graduated 5.35%–9.85% income tax, SUI on the first $43,000, and all employer tax obligations explained.
Practical guides on MN payroll taxes, employer registration, SUI, minimum wage, and labor laws — written for small business owners, not accountants.
Written by payroll professionals at Pacific Data Services — trusted since 1969.
Minnesota’s top rate of 9.85% is among the highest in the nation, with four brackets starting at 5.35%.
Minnesota does not allow a tip credit — all tipped employees must receive the full state minimum wage of $11.13/hr before tips.
At $43,000, Minnesota’s SUI wage base is significantly above average, increasing per-employee unemployment insurance costs.
Minnesota graduated 5.35%–9.85% income tax, SUI on the first $43,000, and all employer tax obligations explained.
Get your EIN, register with Minnesota, set up withholding, new hire reporting — the complete checklist.
New employer rate 1.0%, experienced range 0.10%–9.00%, wage base $43,000.
Minnesota minimum wage $11.13/hr. Minnesota’s minimum wage is $11.13/hr for large employers. No tip credit is allowed — tipped employees must receive the full minimum wage.
IRS classification rules, Minnesota-specific considerations, misclassification penalties.
Gusto vs Paychex vs QuickBooks vs ADP — detailed comparison for Minnesota small businesses.