Minnesota paycheck calculator for hourly & salary pay 2025

Calculating paycheck in Minnesota

Here’s a step-by-step guide to walk you through the paycheck calculator:

1. Fill in the employee’s details 

This includes just two items: their name and the state where they live. This will help the tool calculate some of the employee’s local taxes.

2. Add the employee’s pay information

You should see fields that say pay type, pay rate, hours worked, pay date, and pay period. Start with “pay type” and select hourly or salary from the dropdown menu. 

If the employee is hourly, input their hourly wage under “pay rate” and fill in the number of hours they worked that pay period. If the employee worked more than 40 hours and thus accrued overtime, record 40 here and save the rest for “additional pay.”

If the employee is salaried, both the “pay rate” and “hours worked” fields will disappear. Instead, you’ll need to know how much the employee makes each pay period. You’ll put that into the field labeled “amount.” 

Then select the pay date and the employee’s pay frequency—for example, if you pay them weekly or every two weeks. 

3. Input any additional pay the employee receives

If the employee is salaried, you will only see two fields: bonus and commission. Fill in those amounts, if applicable.

If the employee is hourly, you should see four fields: overtime worked, bonus, commission, and salary. This is your opportunity to add in any additional pay they should receive this pay period. If the employee earned overtime, input the number of overtime hours they worked. The tool calculates overtime pay using time and a half.

4. Fill in the employee’s federal tax information

This includes the employee’s filing status, number of allowances, and additional withholdings. This is information you should be able to glean from the employee’s W-4 form. If you don’t yet have the employee’s W-4, the payroll calculator can fill in tax rates to help you create a semi-accurate paycheck estimate.

5. Fill in the employee’s state tax information

Again, this includes the employee’s filing status, number of allowances, and additional withholdings. This information can be taken from the employee’s state Form W-4. 

6. Calculate the employee’s paycheck

To see an estimate of the employee’s earnings for the pay period, select “calculate check.”

Minnesota income tax rate

Like most states, Minnesota has a graduated-rate income tax structure, meaning the rate of taxation increases as taxable income goes up. As of 2024, the progressive income tax rates range from 5.35% to a top marginal rate of 9.85%. Supplemental payments such as overtime, commissions, and bonuses are subject to a 6.25% Minnesota withholding rate.

Income tax brackets are indexed annually for inflation. This annual adjustment doesn’t change the Minnesota tax rate applied to each bracket.

There are no additional local income taxes on wages in Minnesota.

Minnesota tax withholdings

Every employer who pays Minnesota wages is subject to Minnesota wage withholding requirements. In general, Minnesota wages include any wages paid to Minnesota residents or to nonresident employees for work performed in Minnesota. Employees include anyone paid to perform services for your business, including family, friends, students, or agricultural help. You must withhold tax even if you pay employees in cash or other goods and services.

Minnesota has reciprocity agreements with Michigan and North Dakota, meaning that qualified employees who are residents of these states are not subject to required Minnesota income tax withholding.

Minnesota income tax withholding is generally applied to the same wages and compensation to which federal withholding applies. Likewise, wages that are exempt from federal wage withholding are generally also exempt from Minnesota wage withholding. 

State and federal law provides exemptions from Minnesota wage withholding for nonresident interstate carrier employees, service members, and military spouses. Minnesota income tax rates do not apply to nonresident entertainers performing in Minnesota. Instead, their earnings are subject to Minnesota’s Nonresident Entertainer tax, which is equal to 2% of gross compensation.

In Minnesota, employers pay the entire cost of state unemployment insurance (SUI) tax, which provides benefits to qualified unemployed or underemployed workers during periods of unemployment through no fault of their own. The tax rate depends on a business experience rating and can range from 0.10% to 8.90%.

For specific information on how and where to register your business to submit state withholding and unemployment taxes in Minnesota, consult our payroll tax map. 

In addition to Minnesota state income taxes, employers also have to consider federal tax withholdings. Money taken out for federal taxes goes toward federal income taxes, Social Security, and Medicare. An employee’s tax bracket depends on their gross income, excluding pre-tax deductions.

Employers are also responsible for making FUTA (Federal Unemployment Tax Act) payments. This is a federal unemployment tax and is separate from Minnesota’s state unemployment tax. It’s based on the wages you pay to employees but is NOT deducted from employees’ wages. It must also be paid by the business itself.

Opportunities for deductions on Minnesota paychecks

Aside from standard federal deductions, there are other common payroll deductions that you may need to apply if you offer benefits. Since employers subtract this income before taxes, these deductions can move employees to a lower tax bracket. 

Some common pre-tax deductions include: 

• Health insurance 
• Dental and vision benefits 
• Health savings account (HSA) 
• Wellness benefits
• Disability insurance 
• Life insurance 
• 401(k) contributions 
• Court-ordered garnishments, including child support, alimony, back taxes, and overdue loans 
• Commuter benefits

Note: Our paycheck calculator only accounts for federal and state deductions. Pre-tax deductions do not factor into our paycheck estimates. If you have questions about these deductions, talk to an accountant or payroll specialist.

Frequently asked questions

What are payroll taxes?

Payroll taxes are taxes levied on employers and employees to fund a variety of state and federal programs, including Social Security, Medicare, unemployment benefits, education, defense, construction, and maintenance of infrastructure such as roads, parks, and first responder services. Employers must deduct employee contributions from their paychecks and send tax funds to the proper authorities.

How do I calculate taxes from my paycheck in Minnesota? 

Follow the steps in Calculating Paycheck in Minnesota to make sure your calculation reflects all the relevant factors, including any allowable personal or standard deduction and the current Minnesota tax rates, which are both subject to change from year to year. Also, if you have a new pay rate, you can use this tool as a take-home pay calculator to estimate how much money you’ll actually be depositing each pay period.

How can QuickBooks make Minnesota payroll easier?

QuickBooks has multiple features to make Minnesota payroll easier:

• Automation reduces tedious manual entries and frees up your time.
• QuickBooks calculates, files, and pays your payroll taxes for you—100% accurate tax calculations guaranteed.
• With tax penalty protection, you’re covered up to $25,000 if you receive a penalty for any reason.
• Your team can get paid fast with same-day direct deposit while you hold onto your cash longer.
• Time tracking can improve timesheet accuracy and streamline approvals.
• Seamless integration of processes can save you hours every week.
• With the Workforce app, your team can track their own hours and view their pay info and W-2s.

Flexible payroll plans for your business

QuickBooks offers flexible payroll plans tailored to your business needs. Whether you want to streamline payday, accurately track time, manage HR tasks, or provide benefits to your team, there's a payroll solution for your Minnesota business. 

Existing QuickBooks users can easily add payroll functionalities and leverage the QuickBooks Workforce app for enhanced employee management. Plus, with seamless time tracking and invoicing features, QuickBooks empowers you to stay organized and efficient. Explore QuickBooks payroll today.