Hired your first employee in Virginia? Before you run a single paycheck, you need two government accounts — not one. Virginia payroll taxes 2026 hit employers with a dual-registration requirement that catches even experienced business owners off guard. Miss one registration and you're non-compliant before you've printed a single pay stub.
- State income tax uses graduated brackets from 2% to 5.75% — unchanged for 40+ years
- Two separate registrations required: VA Dept of Taxation (withholding) + VEC (SUTA unemployment tax)
- Filing frequency is assigned based on monthly withholding liability — quarterly, monthly, or semi-weekly
- No local income tax in Virginia — a real advantage over neighboring Maryland
- New hires must be reported to DCSE within 20 days of their start date
Virginia Payroll Tax Rates for 2026
Virginia uses four brackets. The rates are modest by national standards — and frozen. The legislature has debated reform for years; nothing changed for 2026.
| Taxable Income (Annual) | Tax Rate |
|---|---|
| $0 – $3,000 | 2% |
| $3,001 – $5,000 | 3% |
| $5,001 – $17,000 | 5% |
| $17,001 and above | 5.75% |
For any full-time employee, you'll be withholding at or near 5.75% on the bulk of their wages. On top of that: Virginia SUTA goes to the VEC — new employers start at roughly 2.53% on taxable wages. Federal FUTA is 6% on the first $7,000 per employee, but pay SUTA on time and the net cost drops to 0.6%. The Form 941 employer quarterly return guide covers the full federal filing picture.
Two Registrations, Zero Shortcuts
No single "register for payroll" portal exists in Virginia. Two agencies, two accounts, two clocks — and the first starts ticking the moment you have an employee.
Go to tax.virginia.gov and open a Withholding Tax account. This triggers your Form VA-6 annual reconciliation obligation — due every January 31. Do it before payroll run one.
Required once you pay $1,500 or more in wages in any calendar quarter, or once you employ anyone for 20 weeks in a year. Register at vec.virginia.gov — entirely separate from Step 1.
Virginia's Division of Child Support Enforcement runs the state new hire registry. Every new employee must be reported within 20 days of hire. It takes minutes online; skipping it carries penalties.
Virginia Withholding Filing Frequencies
Virginia assigns your filing schedule based on how much you withhold. Most micro-businesses start quarterly and graduate upward as headcount grows.
| Filing Frequency | When It Applies | Form |
|---|---|---|
| Quarterly | Under $100 withheld per quarter | VA-5 |
| Monthly | $100–$999 withheld per month | VA-5 |
| Semi-weekly | $1,000+ withheld per month | VA-16 |
Form VA-6 — the annual reconciliation — is due January 31 every year regardless of frequency. One more advantage worth knowing: Virginia has no local income tax. Maryland employers across the Potomac deal with county rates up to 3.2% stacked on top of state rates. Tysons and Bethesda employers are minutes apart but face very different compliance burdens. For a side-by-side look, see the Maryland payroll taxes 2026 breakdown.
Virginia Payroll Compliance Checklist
A common scenario: an IT consultant in Herndon gets his federal EIN in week one, wins clients for two weeks, and forgets to register with VEC before his first payroll run — late-registration penalty, scrambled backfiles, entirely avoidable. Run this list first. If you're newer to employer obligations overall, our Small Business Payroll 101 guide covers the full federal layer.
- ☐ Register with VA Department of Taxation (iReg) for withholding account
- ☐ Register with Virginia Employment Commission (VEC) for SUTA account
- ☐ Report each new hire to DCSE within 20 days of start date
- ☐ Determine your filing frequency (quarterly / monthly / semi-weekly)
- ☐ File Form VA-5 or VA-16 per your assigned schedule
- ☐ File Form VA-6 annual reconciliation by January 31
- ☐ Pay FUTA annually via Form 940 (net 0.6% after SUTA credit)
- ☐ Withhold and remit VA state income tax using graduated brackets (2%–5.75%)
Frequently Asked Questions
What is the Virginia state income tax withholding rate for 2026?
Virginia uses four brackets: 2% on the first $3,000, 3% on $3,001–$5,000, 5% on $5,001–$17,000, and 5.75% above $17,000. These brackets haven't changed in over 40 years, so for most full-time employees you'll be withholding at or near the 5.75% top rate.
Do I need to register with both the Virginia Department of Taxation and the VEC?
Yes — two agencies, two registrations, no way around it. The Department of Taxation covers state income withholding; the VEC covers unemployment insurance (SUTA). VEC registration kicks in once you hit $1,500 in quarterly wages or employ anyone for 20 weeks in a year.
Are there local payroll taxes in Virginia?
None. Virginia imposes no local income taxes, which is a genuine relief — especially for employers in Northern Virginia near the Maryland border, where county rates across the Potomac add up to 3.2% on top of state rates.
Virginia is one of the cleaner states for payroll compliance — no local taxes, predictable graduated brackets, and a straightforward filing calendar. The catch is the dual registration requirement: open both the Department of Taxation and VEC accounts before your first payroll run, report new hires within 20 days, and confirm your filing frequency upfront. Those three habits cover the vast majority of Virginia employer compliance risk.
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