To assist you in reviewing your state and US territory income tax withholding rates for 2025, the chart provided in the attached PDF contains hyperlinks to the most recent (1) income tax withholding formulas/tables published by the states and US territories, (2) information concerning their respective highest income tax withholding rates (based on their percentage method of withholding) or flat tax withholding rates, and (3) their supplemental withholding rates, if applicable.

Supplemental withholding rate

Like the federal supplemental income tax withholding rate, some jurisdictions with a graduated income tax also allow for an optional flat percentage of income tax withholding for wages that are in addition to regular pay. Where allowed, the supplemental rate greatly simplifies income tax withholding calculations on irregular payments such as bonuses, nonqualified deferred compensation, equity compensation and separation pay.

For federal purposes, employers may opt to use a flat tax rate of 22% on supplemental wages up to $1 million for the year; however, a mandatory flat tax rate of 37% applies to supplemental wages over $1 million. Note that the flat 37% rate applies even if an employee has submitted a federal Form W-4 claiming exemption from federal income tax withholding. (Treas. Reg. Section 31.3402(g)-1; see IRS Publication 15-T for the 2025 federal income tax withholding tables.)

State legislative landscape

In 2024, numerous states adopted retroactive legislation to change their personal income tax rates and several states lowered their income tax rates effective January 1, 2025. It will be important for employers to monitor legislative developments throughout 2025.

Updates to this chart will be available in our 2025 US Employment tax rates and limits report, anticipated to be available in late January 2025, and updated throughout the year. You can find the report, once available, here.