Payroll tax in Delaware: What employers need to know [Updated 2026]
In this article
Employers in the state of Delaware have many responsibilities, including calculating and paying taxes. Handling this obligation can be a challenge: In addition to federal income tax and FICA taxes—like Medicare tax and Social Security contributions—employers are also responsible for state payroll taxes. The fact that payroll tax rates vary from state to state adds to the complexity. The bottom line? It's vital to understand the tax laws in the states where you hire to avoid penalties.
Delaware is one of many US states with a graduated tax rate, meaning employees' taxes go up as their pay increases. Similarly, if your company is experiencing growth and you're adding new hires, the tax contributions you make as an employer will go up, as will the amount of taxes withheld from employees' paychecks.
Whether you're managing a small business or scaling a global company, if you have employees in Delaware, you need a thorough understanding of Delaware state taxes, who owes what, and the tax rates to remain compliant. In this 2026 guide, we'll review all of that and more.
The 2 Delaware payroll taxes
The Delaware Division of Revenue and the Delaware Department of Labor are responsible for administering state-level payroll taxes. According to federal and state new hire reporting requirements, all employers must report new hires and re-hired employees to the Delaware State Directory of New Hire Reporting within 20 days of the employee's start date. Additionally, you must send a W-2 form for each employee to the Division of Revenue.
There are two Delaware payroll taxes. Below, we'll discuss each kind in more detail.
State unemployment insurance tax
Under the Federal Unemployment Tax Act (FUTA), Delaware employers must contribute to federal unemployment taxes. Additionally, the state of Delaware collects its own state unemployment insurance (SUI) to help pay for benefits for workers who lose their jobs due to no fault of their own. The Delaware Department of Labor's Division of Unemployment Insurance is responsible for SUI tax and determining an employer's tax rates.
In 2026, Delaware's SUI taxable wage base increased significantly to $14,500 per employee (up from $12,500 in 2025 and $10,500 in 2024). The new employer rate for 2026 is 1.8%. Experienced employer rates range approximately from 0.6% to 6.5%. Employers also pay a 0.2% Operations and Technology Assessment on all wages, which funds the Delaware Department of Labor's technology initiatives.
Who pays | Employer |
|---|---|
Tax rate | New employers: 1.8% Experienced employers: 0.6% to 6.5% (2026) Plus 0.2% Operations and Technology Assessment on all wages |
Taxable wage limit | First $14,500 per employee per year (2026) |
Maximum tax | $942.50 (6.5% × $14,500) |
Delaware state income tax
In addition to federal income tax, Delaware residents are also responsible for paying a state income tax. The First State has a graduated income tax rate ranging from 2.2% to 6.6%. The amount each person pays is based on the amount they make, not their filing status. Employers must withhold the right amount from each employee's paycheck. The Division of Revenue manages the reporting, collection, and enforcement of the state income tax; tax rates are based on employees' W-2 forms. Note that Wilmington, Delaware's largest city, also levies a local income tax of 1.25% on wages earned within city limits—employers with Wilmington-based employees must withhold and remit this separately.
Who pays | Employee |
|---|---|
Tax rate | 2.2-6.6% |
Taxable wage limit | No limit |
Maximum tax | No maximum |
Navigating payroll tax laws can be challenging, especially in Delaware. The state has a graduated income tax, local income taxes for Wilmington residents, a rising SUI wage base, and an Operations and Technology Assessment fee. Rippling's payroll compliance software makes it easy to file the right amount of taxes. Rippling automatically calculates your taxes—including the new $14,500 SUI wage base and the 0.2% Operations and Technology Assessment—submitting tax forms and payments on your behalf, with tax laws always monitored at the federal and state levels. Rippling PEO takes it a step further: It can register and maintain your state tax accounts for you, creating an even more automated payroll tax process.
Payroll tax due dates in Delaware
Delaware employers must submit payroll tax payments to the Delaware Division of Revenue by specific due dates. These dates vary depending on whether they file monthly, eighth-monthly, or quarterly payments. The state of Delaware encourages anyone filing electronically to submit their forms and payments a day early to allow enough time for processing; you must also use the correct tax code, 01106.
The deadlines for employers filing quarterly payments are below:
First quarter (January-March): Due May 1
Second quarter (April-June): Due July 31
Third quarter (July-September): Due October 31
Fourth quarter (October-December): Due January 31
If one of these dates falls on a weekend or a legally recognized holiday, you must submit your payments by the following business day. Monthly and eighth-monthly payment deadlines are available on the Delaware Division of Revenue website.
How to submit payroll taxes in Delaware
We've now covered the types of payroll taxes you're responsible for and their due dates. In Delaware, you have two options.
Enroll in e-Services
The Delaware Division of Revenue encourages businesses to pay their payroll taxes, local income taxes, and any other state taxes online using the Delaware Taxpayer Portal. You can either create a portal account or pay as a guest; instructions are available on the Division of Revenue's website.
Transfer funds electronically
Delaware employers can make tax payments via Electronic Funds Transfer (EFT). The Delaware Division of Revenue accepts payments made by either ACH debit or ACH credit. To make payments using this option, you'll have to fill out the ACH for Gross Receipts Form or the ACH for Withholding/Corporate Tentative Tax Form and mail it to: The State of Delaware, Division of Revenue, ATTN: ELECTRONIC FUNDS COORDINATOR, P.O. Box 8750, Wilmington, DE 19899-8750.
Rippling's full-service payroll software
Looking for a payment option that's even easier? With Delaware's SUI wage base climbing to $14,500 in 2026 and the 0.2% Operations and Technology Assessment to track, Rippling's payroll software can automate the most time-consuming parts of the payroll process. Rippling automatically calculates and files your payroll taxes with the relevant agencies—so you never have to worry about nailing your compliance work.
Frequently Asked Questions
Are there local tax laws in Delaware?
Yes. In the state of Delaware, residents who live in cities with a population of over 50,000 people must remit 1.25% of their income to the municipality. Currently, the city of Wilmington is the only municipality in the state that’s permitted to levy an earned income tax.
What is Delaware's SUI wage base for 2026?
Delaware's SUI taxable wage base for 2026 is $14,500 per employee—a significant jump from $12,500 in 2025 and $10,500 in 2024. This rapid increase means Delaware employers are now paying UI taxes on a substantially larger portion of each employee's wages than just two years ago. In addition to SUI, all Delaware employers pay a 0.2% Operations and Technology Assessment on all wages (with no cap), which funds the Department of Labor's technology initiatives. New employers pay a UI rate of 1.8% in 2026; experienced employer rates vary based on claims history.
Does Wilmington, Delaware have a local income tax?
Yes. Wilmington, Delaware levies a local income tax of 1.25% on wages earned within city limits. Employers with employees who work in Wilmington must withhold this local tax from paychecks and remit it to the City of Wilmington separately from state taxes. The tax applies based on where work is performed, not where the employee lives—so both Wilmington residents and nonresidents who work within the city are subject to it. Delaware’s other municipalities do not impose local income taxes, making Wilmington unique in the state.
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Vanessa Kahkesh
Content Marketing Manager, HR
Vanessa Kahkesh is a content marketer for HR passionate about shaping conversations at the intersection of people, strategy, and workplace culture. At Rippling, she leads the creation of HR-focused content. Vanessa honed her marketing, storytelling, and growth skills through roles in product marketing, community-building, and startup ventures. She worked on the product marketing team at Replit and was the founder of STUDENTpreneurs, a global community platform for student founders. Her multidisciplinary experience — combining narrative, brand, and operations — gives her a unique lens into HR content: she effectively bridges the technical side of HR with the human stories behind them.
Hubs
Explore more
Payroll tax in Alabama: What employers need to know [Updated 2026]
Managing payroll in Alabama? Read our 2026 employer's guide on staying compliant with Alabama payroll tax laws, including SUI rates and income tax withholding.
Payroll tax in Idaho: What employers need to know [Updated 2026]
Managing payroll in Idaho? Read our 2026 employer's guide on Idaho payroll taxes, including SUI (1.0% new employer rate, $58,300 wage base) and the 5.8% flat income tax.
Payroll tax in Alaska: What employers need to know [Updated 2026]
Managing payroll in Alaska? Read our 2026 employer's guide on staying compliant with Alaska payroll tax laws, including the UI wage base increase to $54,200.
Payroll tax in Missouri: What employers need to know [Updated 2026]
Managing payroll in Missouri? Read our 2026 employer's guide on staying compliant with Missouri payroll tax laws, including the updated income tax rate and SUI wage base.
Payroll tax in Hawaii: What employers need to know [Updated 2026]
Managing payroll in Hawaii? Read our 2026 employer's guide on Hawaii payroll taxes, including SUI ($64,500 wage base), TDI, and progressive income tax withholding.
Payroll tax in Florida: What employers need to know [Updated 2026]
Managing payroll in Florida? Read our 2026 employer's guide on staying compliant with Florida payroll tax laws, including reemployment tax rates and filing deadlines.
Payroll tax in Maryland: What employers need to know [Updated 2026]
Managing payroll in Maryland? Read our 2026 employer's guide on staying compliant with Maryland payroll tax laws, including new top income tax brackets and the FAMLI program delay.
Medical assistant salary in Delaware (2026)
Find out what medical assistants earn in Delaware — median $44,490, entry-level to $57,280 — plus city breakdowns and regional comparisons to budget smarter.
See Rippling in action
Increase savings, automate busy work, and make better decisions by managing HR, IT, and Finance in one place.