Payroll Virginia: Employer Tax and Software Guide
Virginia payroll for employers: Form VA-4 withholding, the $8,000 SUTA base, new 2026 wage and pay transparency laws, and 10 providers compared on price.
Virginia Payroll: The Employer Guide
State withholding on Form VA-4, the unusually low unemployment wage base, the wage and hour laws that changed this year, and how 10 payroll providers price the work
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. 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 neighboring jurisdictions that change which state gets withheld. The second is that the 2026 General Assembly session produced a substantial package of new wage and hour legislation, including a pay transparency requirement that takes effect July 1, 2026 and remedies for wage claims that now exceed what federal law provides.
This guide covers what Virginia requires of employers, what changed this year, and how 10 payroll providers price the work at 5, 15, and 50 employees.
What Virginia actually requires from employers
Four obligations sit on top of federal payroll, and unusually for a state guide, the list is short because Virginia genuinely 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 moved in decades, which means most full-time employees pay the top marginal rate on the bulk of their earnings.
| Taxable income | Rate | Applies to |
|---|---|---|
| First $3,000 | 2% | All filing statuses: Virginia uses identical thresholds regardless of status |
| $3,001 to $5,000 | 3% | All filing statuses |
| $5,001 to $17,000 | 5% | All filing statuses |
| Above $17,000 | 5.75% | Most of a typical full-time wage |
Withholding runs off Form VA-4, which is separate from the federal W-4 and must be collected from every new hire. Employees claim personal exemptions plus additional exemptions for age 65 or older and for blindness, with each exemption reducing annualized taxable wages by $930. The form also allows an employee to request extra voluntary withholding. Supplemental wages such as bonuses are withheld at a flat 5.75 percent. Employers register for withholding through Virginia Tax online services, which also creates the Virginia Employment Commission account in the same process.
Unemployment insurance
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.
| Employer type | 2026 rate | Wage base | Notes |
|---|---|---|---|
| New employer | 2.5% | $8,000 | Includes a 0.20% fund building charge and 0.03% pool cost charge |
| Experience-rated | 0.1% to 6.2% | $8,000 | Assigned annually by VEC notice, same add-on charges included |
| Maximum annual cost | Up to $496 | $8,000 | Per employee at the top of the range |
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. Our guide to state unemployment tax covers how this compares nationally.
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 distinguishes it from several neighbors. That last point has an expiry 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 the employee's first day on the job. Most full-service payroll plans file it automatically and self-service tiers generally do not. See our guide to new hire reporting for what the report must contain.
What changed for Virginia employers this year
The 2026 General Assembly session produced more employment legislation than Virginia has seen in several years. Three pieces matter directly for anyone setting up or reviewing payroll.
Pay transparency and a ban on salary history questions
Effective July 1, 2026, Virginia employers may not seek a prospective employee's pay history, may not rely on it in hiring decisions, and may not use it to set pay on hire. Every job posting must disclose the pay range for the position, and that range must be set in good faith. Retaliating against someone for declining to share pay history or for asking about a range is prohibited, and aggrieved applicants and employees may recover actual damages.
This is a hiring process requirement rather than a payroll calculation, but it changes the paperwork and the job posting template rather than 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 automatic recovery of double the unpaid wages plus prejudgment interest and attorney fees, with triple damages available where the violation was knowing. The same legislation confirms that commissions count as wages, reversing a 2025 Virginia Supreme Court decision, and broadens the Department of Labor and Industry's authority to investigate and to enter an employer's premises to review records.
Minimum wage schedule and a coming paid leave program
The minimum wage is $12.77 per hour for 2026, up from $12.41, per the Virginia Department of Labor and Industry. Legislation enacted this year sets $13.75 from January 1, 2027 and $15.00 from January 1, 2028, with annual adjustments thereafter. The historical exemption for farm laborers is eliminated as of January 1, 2027.
Separately, Virginia enacted a state-administered paid family and medical leave insurance program. Payroll contributions begin April 1, 2028 and benefits become claimable December 1, 2028, administered by the Virginia Employment Commission. The structure is worth knowing now because it is headcount-sensitive: 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. Benefits will run up to 12 weeks at 80 percent of average weekly wages.
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.
| Provider | Best For | Starting Price | Pricing Model | VA Tax Filing | Multi-State Included | Onboarding Tools | Trial |
|---|---|---|---|---|---|---|---|
| OnPay | All-in pricing, every state | $49 + $6/ee | Base + PEPM | 1 month | |||
| Gusto | First payroll purchase | $49 + $6/ee | Base + PEPM | Until 1st run | |||
| Patriot | Lowest cost, single state | $37 + $5/ee | Base + PEPM | 30 days | |||
| QuickBooks | Books already in QuickBooks | $50 + $6.50/ee | Base + PEPM | 30 days | |||
| SurePayroll | Micro and household employers | $29 + $7/ee | Base + PEPM | Varies | |||
| Square | Retail and food service | $35 + $6/ee | Flat + PEPM | Free trial | |||
| Paylocity | Growing past 50 employees | Quote | Quote | Demo | |||
| ADP RUN | Compliance depth under 50 staff | ~$79 + $4/ee | Quote | 3 months | |||
| Paychex Flex | A person to call about a notice | Quote | Quote | Varies | |||
| Rippling | Payroll tied to HR and IT | $35 + $8/ee+ | Modular PEPM | Demo |
OnPay
One plan at $49 per month plus $6 per employee, with every feature included and no tiers to climb. Tax filing covers all 50 states with no multi-state surcharge, which is the single most useful characteristic for an employer anywhere in the Washington commuter corridor. Year-end W-2 and 1099 filing is included and the first month is free without a credit card.
Gusto
The most 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 March 2026 base increase.
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
The cheapest legitimate full-service payroll on the market at $37 per month plus $5 per employee, including federal, state, and local tax filing plus new hire reporting. Basic at $17 plus $4 calculates only and leaves depositing and filing to the employer.
Additional state filings cost $12 per month each, which narrows the advantage for anyone with staff in DC or Maryland. For a single-state Virginia business under 20 people, nothing else comes close on cost.
QuickBooks Payroll
Core runs $50 per month plus $6.50 per employee with full-service tax filing on every tier, following a per-employee price increase across the Workforce plans on July 1, 2026. The reason to choose it is unchanged: if the books already live in QuickBooks Online, payroll entries land in the general ledger without an export step.
SurePayroll
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
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
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 crossing 50 employees or operating in several states, it becomes a reasonable candidate. Pricing is quote-only.
ADP RUN
The deepest tax compliance operation in the category, which matters for an employer with staff distributed across Virginia, DC, and Maryland. Third-party estimates put the Essential tier near $79 per month plus $4 per employee, but ADP does not publish rates and most buyers report paying more once add-ons land. Contracts typically run annually with automatic renewal.
Paychex Flex
Competes with ADP on the same terms: a service relationship rather than a software subscription, with a named contact at higher tiers. Pricing is quote-only, and quarterly administrative charges are a recurring theme in customer reports. Worth a quote if you want a person to call about a reciprocity question rather than a help article.
Rippling
A unified employee record where payroll, HR, and IT provisioning share one data model, starting at $35 per month plus $8 per employee for the core platform with payroll as a separate module. Real configurations land well above the headline figure. Multi-state registration is handled within the same workflow, which is genuinely useful in this region, but the platform is overbuilt for a 15-person 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. That last 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.
| Provider | 5 employees | 15 employees | 50 employees | 2nd State Cost | Notes |
|---|---|---|---|---|---|
| Patriot Full Service | $62 | $112 | $287 | $12/mo per extra state | Cheapest single-state option |
| SurePayroll | $64 | $134 | $379 | $9.99/mo flat | Micro-employer focus |
| Square Payroll | $65 | $125 | $335 | Included | Strong for hourly staff |
| OnPay | $79 | $139 | $349 | Included | No tier to climb |
| Gusto Simple | $79 | $139 | $349 | Forces Plus tier | A DC or MD hire changes this |
| QuickBooks Core | $83 | $148 | $375 | Fee per extra state | General ledger sync |
| ADP RUN Essential | ~$99 | ~$139 | ~$279 | Quote | Quote-only above Essential |
Two patterns are worth naming. The budget providers are genuinely cheaper at small headcounts and stay cheaper, with Patriot at 50 employees costing less than most competitors at 25. And the second-jurisdiction column 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. For a wider view, see the payroll software for small business comparison and the payroll pricing guide.
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 compliance surface that expanded most this year is documentation. Pay transparency requires a good-faith range in every posting from July 1, 2026, and the expanded wage claim remedies mean that classification decisions and pay records carry more downside than they did last year. The Virginia HR compliance guide covers the surrounding employment law.
Before you choose
FirstHR does not process payroll, file payroll taxes, or administer benefits. Every provider above does something we do not, and if payroll is the problem you are solving, one of them is your answer.
What we handle is the layer underneath, and in Virginia that layer got heavier this year. 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, e-signatures on I-9s and offer letters, document management, and employee records for US teams of 5 to 50 people at a flat $98 to $198 per month. 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 worth $930 each. 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. Employees claim personal exemptions plus additional exemptions for age 65 or older and for blindness, each reducing annualized taxable wages by $930, and may request extra voluntary withholding on the same form.
What is the Virginia SUTA wage base and rate?
The wage base is $8,000 per employee per year. New employers are generally assigned 2.5 percent including the fund building and pool cost charges, and experience-rated employers fall between 0.1 percent and 6.2 percent, with the rate arriving annually by notice from the Virginia Employment Commission.
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 resident of any of those jurisdictions working in Virginia has income tax withheld for their home jurisdiction with the correct exemption paperwork on file. Reciprocity covers income tax only and does not change unemployment obligations.
What is the Virginia minimum wage?
$12.77 per hour effective January 1, 2026, rising to $13.75 on January 1, 2027 and $15.00 on January 1, 2028 under legislation enacted this year, with annual adjustments after that. The tipped cash wage follows the federal $2.13 where tips bring the employee to the full minimum.
What changed for Virginia employers this year?
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 commissions were confirmed as wages.
How much does payroll software cost for a Virginia small business?
At 5 employees, published July 2026 rates run roughly $62 for Patriot Full Service, $64 for SurePayroll, $65 for Square Payroll, $79 for OnPay or Gusto Simple, and $83 for QuickBooks Core. At 50 employees the same plans land between $287 and $375. ADP RUN, Paychex Flex, and Paylocity quote individually.