Payroll Virginia: Employer Tax and Software Guide

My advice to any founder setting up Virginia payroll is to learn the state rules before comparing software, because the rules decide which provider fits. This guide covers what Virginia requires of employers, what changed on July 1, 2026, and how 10 payroll providers price the work, with published rates modeled at 5, 15, and 50 employees.

Virginia is, on paper, one of the easier states to run payroll in. No local income taxes anywhere in the Commonwealth. No state disability insurance. No paid leave deduction yet. An unemployment wage base of $8,000, among the lowest in the country. Compared with Maryland across the river, where counties layer their own rate on top of the state, the arithmetic is genuinely simpler.

Then two things complicate it. The first is geography: Northern Virginia sits inside a commuter corridor where crossing into DC or Maryland for work is unremarkable, and Virginia holds reciprocity agreements with five nearby jurisdictions that change which state gets withheld.

The second complication is the 2026 General Assembly session, which produced a substantial package of new wage and hour legislation. It includes a pay transparency requirement that took effect July 1, 2026, and remedies for wage claims that now exceed what federal law provides.

What Virginia actually requires from employers

Five obligations sit on top of federal payroll: withholding state income tax, filing and paying that withholding, unemployment insurance, new hire reporting, and the rules on pay frequency, pay statements, and final wages. That is a short list for a state guide, because Virginia does not have the local tax layer that complicates its neighbors.

State income tax withholding and Form VA-4

Virginia uses four graduated brackets, and the notable feature is how quickly they run out. The top rate of 5.75 percent applies to taxable income above $17,000, a threshold that has not changed since 1990, according to the Joint Legislative Audit and Review Commission. That leaves a large share of a typical full-time salary in the top bracket.

Withholding runs off Form VA-4, which is separate from the federal W-4 and must be collected from every new hire. Without one on file, the employer withholds as if the employee claimed no exemptions. The form also allows an employee to request extra voluntary withholding.

Under the Virginia Tax withholding formula, each personal or dependent exemption reduces annualized taxable wages by $930, and each exemption for age 65 or older or for blindness by $800. Bonuses have their own rule: when a bonus is paid separately and tax was already withheld from regular wages, the employer may withhold a flat 5.75 percent from it.

Employers set up withholding through Virginia Tax's online registration, and they can register with the Virginia Employment Commission at the same time.

Filing and paying Virginia withholding

How often you file and pay Virginia withholding depends on the size of the liability rather than on your pay schedule. Virginia Tax sets the status from average monthly liability, so a growing payroll can move from quarterly to monthly to semi-weekly with nothing else about the business changing.

Semi-weekly filers carry one extra return. Form VA-16 reconciles the payments made during a quarter and is due by the end of the following month.

Every employer also files the annual Form VA-6 by January 31, or within 30 days of the final wage payment if the business closes. It goes in electronically through the state eForms system or online services. The W-2 and 1099 data is due the same day but goes in separately through Web Upload.

All of this filing is the part a full-service plan takes over and a self-service tier hands back. If you are weighing a cheaper self-file option, the work you are taking on is the VA-5 or VA-15 cycle plus the January 31 summary, on a deposit schedule that can shift as the payroll grows.

Unemployment insurance

Virginia unemployment insurance is paid entirely by the employer, with nothing withheld from employees. The taxable wage base is $8,000 per employee per year and has been stable for years, which caps the annual per-employee cost at a level most states passed long ago.

The Virginia Employment Commission assigns rates by calendar year. A new employer starts at a 2.5 percent base rate. Experience-rated base rates, which reflect the unemployment benefits charged to the employer's account, normally run from 0.1 percent to 6.2 percent.

Add-on charges come on top of the base rate. A pool cost charge is added to every rate, plus a 0.2 percent fund building charge in years when the trust fund balance factor, which compares the state's unemployment trust fund with an adequate balance, is 50 percent or less.

The practical implication of a low wage base is that unemployment stops being a meaningful line item early in the year. An employee earning $60,000 crosses the $8,000 threshold before the end of February, after which the employer owes no further state unemployment tax on that person until January.

No local taxes, and no paid leave deduction yet

Virginia imposes no city or county income tax anywhere in the state. There is also currently no state disability insurance and no paid family leave payroll contribution, which sets it apart from neighboring DC. That last point has an end date, covered below.

New hire reporting

Employers with operations in Virginia must report newly hired and rehired employees who live or work in the state within 20 days of their first day on the job, and new independent contractors within 20 days of the contract start, under Virginia Code section 63.2-1946. Most full-service payroll plans file these reports automatically; self-service tiers generally do not.

Pay frequency, pay statements, and final wages

Virginia sets pay frequency by how someone is paid rather than by one statewide rule. Hourly employees are paid at least every two weeks or twice a month, and salaried employees at least once a month, under Virginia Code section 40.1-29. Employees earning above 150 percent of the state average weekly wage may agree to monthly pay instead.

Every pay period the employee gets a statement showing the employer name and address, hours worked, rate of pay, gross wages, and the amount and purpose of each deduction, in enough detail to check the arithmetic. Those records are kept three years. Final wages are due on or before the day the person would have been paid had the job continued.

What changed for Virginia employers

The 2026 General Assembly session produced a broad package of employment legislation. Three pieces matter directly for anyone setting up or reviewing payroll: pay transparency, expanded remedies for wage claims, and the minimum wage schedule.

Pay transparency and a ban on salary history questions

Effective July 1, 2026, Va. Code 40.1-28.7:12 bars Virginia employers from seeking a prospective employee's pay history, relying on it in hiring decisions, or using it to set pay on hire. Every public and internal job posting must disclose the pay range for the position, and that range must be set in good faith.

The same law prohibits retaliating against someone for declining to share pay history or for asking about a range, and aggrieved applicants and employees may recover actual damages.

Pay transparency is a hiring process requirement rather than a payroll calculation: it changes the paperwork and the job posting template, not the withholding math. Employers who have been reusing postings without a range need to update them.

Expanded remedies for wage and hour claims

An omnibus bill effective July 1, 2026 extends the full remedies of the Virginia Wage Payment Act to minimum wage violations, overtime violations, and worker misclassification claims. That means a worker can recover the unpaid wages, an equal amount in liquidated damages, prejudgment interest at 8 percent a year, and attorney fees, with triple the wages for a knowing violation.

The amended Va. Code 40.1-29 also defines wages to include commissions and sets a three-year deadline to sue. The Commissioner of Labor and Industry can open an investigation without a complaint, issue subpoenas, and refer cases to the Attorney General. An employer escapes the extra damages only by showing good faith and paying all wages owed within 14 days of notice.

Minimum wage schedule and a coming paid leave program

The Virginia minimum wage is $13.75 per hour from January 1, 2027, and $15.00 from January 1, 2028, under the schedule enacted in 2026 in Va. Code 40.1-28.10. From 2029 the rate is adjusted each year for inflation.

The $12.77 rate applies through December 31, 2026, per the Virginia Department of Labor and Industry. The historical exemption for farm laborers ends on January 1, 2027.

Separately, Virginia enacted a state-administered paid family and medical leave insurance program, run by the Virginia Employment Commission. Payroll contributions begin April 1, 2028. Benefits become claimable December 1, 2028 and will run up to 12 weeks at 80 percent of average weekly wages, subject to a weekly maximum.

The program's structure is worth knowing now because it depends on headcount: employers with more than 10 employees may deduct up to half the contribution from employee wages, while employers with 10 or fewer must deduct half and owe no additional employer share.

10 payroll providers for Virginia employers compared

Every provider below files Virginia state withholding and unemployment. The differences that matter here are what happens when someone works in DC or Maryland, whether onboarding document collection is included, and whether the price is published at all.

OnPay

OnPay sells one plan at $49 per month plus $6 per employee, with no tier to climb; HR tools and time tracking are add-ons. Tax filing covers all 50 states with no multi-state surcharge, the single most useful feature for an employer anywhere in the Washington commuter corridor. Year-end W-2 and 1099 filing is included, and the first month is free.

Gusto

Gusto is a common first payroll purchase for US small businesses. Tax filing is automatic, the interface is genuinely pleasant, pricing is published, and the Simple plan runs $49 per month plus $6 per employee after a base increase during 2025.

The Virginia-specific catch is that Simple covers single-state payroll only. One hire living in Maryland or working in DC moves the account to Plus at $80 plus $12 per employee. Given how routine cross-border employment is in Northern Virginia, model the Plus number rather than the Simple number if there is any chance of a second jurisdiction.

Patriot Software

Patriot's Full Service plan runs $37 per month plus $5 per employee with federal, state, and local tax filing included. New hire reports remain the employer's to file. Basic, at $17 plus $4, calculates only and leaves depositing and filing to the employer.

Full Service has the lowest monthly total in the cost table below at every headcount modeled, so for a small single-state Virginia business, no other full-service plan here costs less. Additional state filings cost $12 per month each, though, which narrows the advantage for anyone with staff in DC or Maryland.

QuickBooks Workforce

QuickBooks Workforce (formerly QuickBooks Payroll) starts with Workforce Payroll, the old Core plan, at $50 per month plus $7 per employee. That price follows a per-employee increase across the Workforce plans on July 1, 2026. Federal and state tax filing is included on every tier.

The reason to choose QuickBooks Workforce is unchanged: if the books already live in QuickBooks Online, payroll entries land in the general ledger without an export step.

SurePayroll

SurePayroll is owned by Paychex and aimed at very small and household employers, at roughly $29 per month plus $7 per employee. The distinguishing feature for Virginia is a flat $9.99 monthly multi-state fee regardless of how many jurisdictions are involved, rather than a per-state charge.

Square Payroll

Square Payroll offers full-service payroll at $35 per month plus $6 per person paid, with tax filing included. For a Virginia retail, restaurant, or service business already running Square point of sale, hours and tips flow into payroll with nothing to configure. Outside the Square ecosystem the product is competent but unremarkable, with thin HR functionality.

Paylocity

Paylocity is a full HR and payroll platform aimed above the smallest end of the market, with strong multi-jurisdiction handling and a well-regarded employee self-service experience. For a Virginia company growing into the mid-size range or operating in several states, it becomes a reasonable candidate. Pricing is quote-only.

ADP RUN

ADP RUN calculates, files, deposits, and reconciles payroll taxes in every package, and ADP pays the resulting fines if it makes a filing error. That protection matters for an employer with staff distributed across Virginia, DC, and Maryland.

Multi-jurisdiction payroll is included in all four packages, but ADP publishes no rates for Essential, Enhanced, Complete, or HR Pro, so every price starts with a quote. RUN requires no signed contract.

Paychex Flex

Paychex Flex competes with ADP on the same terms: a service relationship rather than a software subscription, with a payroll specialist included on the Complete package and sold as an add-on below it.

Paychex Flex pricing is quote-only for the Basic, Foundations, Advanced, and Complete packages alike. Ask for a quote if you want a person to call about a reciprocity question rather than a help article.

Rippling

Rippling runs payroll, HR, and IT provisioning on one unified employee record, so all three share one data model. Its pricing page lists no rates, but its small-business page starts payroll plans at $8 per user per month plus a $40 monthly base fee. Its blog prices the core platform at $8 per employee and the payroll module at another $8 on annual billing, so configured quotes can run higher.

Multi-state registration is handled within the same workflow, which is useful in this region, but the platform is overbuilt for a small Virginia business with no IT complexity.

What each provider actually costs a Virginia employer

The table below models published rates at three headcounts plus what happens when a second jurisdiction enters the picture. The second-state column carries more weight in Virginia than in most states, because the Northern Virginia corridor makes a DC or Maryland connection ordinary rather than exceptional.

Two patterns are worth naming. Patriot is the cheapest published plan at every headcount modeled, and at 50 employees ($287 a month) it still costs $48 less than the next-cheapest, Square Payroll.

The other pattern is in the second-state column, which reorders the ranking: Gusto Simple is competitive until a single Maryland hire forces the Plus tier, at which point the same 15-person payroll jumps from $139 to $260.

Four providers have no modeled figures. ADP RUN, Paychex Flex, and Paylocity publish no rates and quote each account. Rippling's pricing page is a quote form, and its small-business page gives only a starting price, $40 a month plus $8 per user, or $80 at 5 employees and $440 at 50 before any added product.

Choosing a payroll provider for Virginia

Four questions separate providers that will work here from providers that will generate correction notices.

Beyond the payroll engine, the part of compliance that grew most on July 1, 2026 is documentation. Pay transparency now requires a good-faith range in every posting, and the expanded wage claim remedies mean that classification decisions and pay records carry more downside than they used to.

Before you choose

FirstHR is an onboarding and HR platform, not a payroll provider. Payroll runs, payroll tax filing, and benefits administration come from the providers above, so if payroll is the problem you are solving, one of them is your answer.

What we handle is the layer underneath, and in Virginia the July 2026 laws made that layer heavier. A correct paycheck depends on a VA-4 that was actually collected, a classification decision that holds up, and a 20-day reporting deadline nobody missed.

FirstHR covers onboarding workflows that put the I-9, the federal W-4, and the VA-4 on each new hire's first-day task list, with the completed forms kept in the employee file, plus e-signatures on offer letters and acknowledgments, document management, and employee records for US small businesses at a flat $98 a month for up to 10 people or $198 for 11 to 50.

If the recurring failure is paperwork arriving late or incomplete rather than the tax math itself, that is a different problem than payroll processing, and it is the one we built for.

Frequently Asked Questions

What payroll taxes do Virginia employers withhold?

State income tax on four brackets from 2 percent to 5.75 percent, with the top rate starting above $17,000 of taxable income. Employees claim exemptions on Form VA-4: $930 for each personal or dependent exemption and $800 for age 65 or older or blindness. Employers separately pay unemployment insurance on the first $8,000 of wages from their own funds. Virginia has no local payroll taxes.

Does Virginia have a state W-4 form?

Yes, Form VA-4, separate from the federal W-4 and required from every new hire. Each personal or dependent exemption reduces annualized taxable wages by $930 and each exemption for age 65 or older or for blindness by $800, and employees may request extra voluntary withholding on the same form. Without a VA-4, withhold as if no exemptions were claimed.

What is the Virginia SUTA wage base and rate?

The wage base is $8,000 per employee per year. New employers start at a 2.5 percent base rate and experience-rated base rates normally run from 0.1 percent to 6.2 percent, with a pool cost charge and, in some years, a 0.2 percent fund building charge added on top. The Virginia Employment Commission assigns each rate by calendar year.

Does Virginia have local payroll taxes?

No. Virginia imposes no city or county income tax anywhere in the state, unlike Maryland where counties add their own rate. There is also currently no state disability insurance or paid leave deduction, though paid leave contributions begin in April 2028.

Which states have reciprocal agreements with Virginia?

The District of Columbia, Kentucky, Maryland, Pennsylvania, and West Virginia. A qualifying resident of any of those jurisdictions working in Virginia is exempt from Virginia withholding once the exemption is claimed on Form VA-4, and DC and Kentucky residents qualify only if they commute daily. Reciprocity covers income tax only and does not change unemployment obligations.

What is the Virginia minimum wage?

$13.75 per hour from January 1, 2027 ($12.77 through December 31, 2026), then $15.00 from January 1, 2028 under legislation enacted in 2026, with annual inflation adjustments from 2029. The tipped cash wage follows the federal $2.13 where tips bring the employee to the full minimum.

What changed for Virginia employers?

From July 1, 2026, employers must post a good-faith pay range in every job listing and may not seek or rely on salary history. Wage, overtime, and misclassification claims gained double damages plus interest and attorney fees, with triple available for knowing violations, and the amended statute defines wages to include commissions.

How much does payroll software cost for a Virginia small business?

At 5 employees, published October 2026 rates run roughly $62 for Patriot Full Service, $64 for SurePayroll, $65 for Square Payroll, $79 for OnPay or Gusto Simple, and $85 for QuickBooks Workforce Payroll. At 50 employees the same plans land between $287 and $400. ADP RUN, Paychex Flex, and Paylocity quote individually, and Rippling's pricing page is a quote form, though its small-business page starts payroll at $40 plus $8 per user.