Missouri Withholding laws & HR compliance analysis

Missouri Withholding: What you need to know

All Missouri employers are required to deduct state income tax from wages of both resident and nonresident employees during each payroll period. Withholding may be based on wage bracket withholding tables or the percentage method provided by the Department of Revenue (DOR).
For a Limited Time receive a FREE HR Report on the "Critical HR Recordkeeping”.  This exclusive special report covers hiring records, employment relationships, termination records, litigation issues, electronic information issues, tips for better recordkeeping, and a list of legal requirements.  Download Now
Withholding applies to wages of residents, regardless of where earned and to wages of nonresidents for income earned in Missouri. The term “wages” for Missouri income tax withholding purposes has the same meaning as it has for federal withholding. Wages include all pay given to an employee for services performed. The pay may be in cash or in other forms. Wages include salaries, vacation allowances, bonuses, and commissions, regardless of how measured or paid.
Generally, employees who are subject to federal income tax withholding are also subject to state income tax withholding. Agricultural, domestic, and most other employees who are exempt from federal withholding are also exempt from state withholding. Changes to the Internal Revenue Code are automatically adopted by Missouri. Thus, compensation that is subject to federal withholding is also subject to state withholding.
Beginning in tax year 2019, the DOR removed the federal tax deduction from the withholding tax calculation. This change may result in a small increase to the amount withheld from employees’ paychecks. Any withholding in excess of the tax owed will be refunded after the taxpayer files the individual income tax return.
Each employee must file a Form MO W-4, Employee Withholding Certificate, to indicate filing status. If no form is provided, the employer must withhold at a single tax rate (MO Rev. Stat. Sec. ...

Read more about Withholding