Louisiana Withholding laws & compensation compliance analysis

Louisiana Withholding: What you need to know

Every employer that has resident or nonresident employees performing services (except employees exempt from income tax withholding) within Louisiana is required to withhold Louisiana income tax based on the employee's withholding exemption certificate.
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Wages of Louisiana residents performing services in other states are subject to withholding of Louisiana income tax if the wages are not subject to withholding of net income tax by the state in which the services are performed. If residents earn wages in another state, they are subject to withholding only in that state, except that Louisiana residents who earn wages in Texas are subject to Louisiana withholding, because Texas does not have a state income tax.
Taxes must be withheld on “wages,” which includes all cash and noncash payments for services performed by an employee.
Exclusions. Payments for the following services are exempt from withholding (LA Stat. Sec. 47:111):
• Agricultural labor
• Domestic service
• Services by news carriers under the age of 18
• Services not in the usual course of the employer's business, if the compensation is less than $50 or is not paid in cash
• Under some circumstances, services by newspaper or magazine vendors
• Services by ordained ministers or members of a religious order
• Services performed by a U.S. citizen or resident for a foreign government
• (Beginning in tax year 2018) Services performed by a nonresident individual during a declared state disaster or emergency
Additionally, the following are exempt from withholding: contributions to a “cafeteria” benefit plan or to a deferred compensation plan, such as a 401(k) plan; business expense advances or reimbursements; and payments made under a wage ...

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