Most employers know about federal taxes and state unemployment insurance. Fewer realize that a handful of states add their own employer payroll taxes on top — small, state-specific levies that are easy to miss and that not every payroll system calculates. If you have employees in these states, here is what applies.
Rates change; confirm the current figures with each agency. This is general information, not tax advice.
California — Employment Training Tax (ETT)
An employer-only tax of 0.1% on the first $7,000 of each employee’s wages (max $7 per employee per year), reported on the DE 9 with unemployment insurance. Small, but it belongs on the return.
Vermont — Child Care Contribution (Act 76)
Vermont’s Child Care Contribution is a 0.44% payroll tax on all Vermont wages, with no wage cap. The employer owes the full amount but may choose to withhold up to a quarter of it (0.11%) from the employee. It is remitted alongside Vermont income-tax withholding on the quarterly WHT-436. It took effect in 2024 and is one of the newest state employer payroll taxes in the country.
Nevada — Modified Business Tax (MBT)
Nevada has no state income tax, but it does have the Modified Business Tax — a quarterly, employer-only tax on gross wages above $50,000 per quarter (after subtracting employer-paid health premiums). The general rate is 1.17%; financial institutions and mining pay 1.554%. Because of the quarterly threshold, it is calculated at quarter-end rather than per paycheck.
Oregon — transit payroll taxes (TriMet & Lane)
Oregon employers with work performed inside a transit district owe an employer payroll tax on those wages: the TriMet district (Portland metro) at about 0.82% and the Lane district (Eugene/Springfield) at 0.80% for 2026. It is separate from Oregon’s statewide transit tax and applies based on where the work is done.
Colorado — Occupational Privilege Tax (OPT)
A few Colorado cities — Denver, Greenwood Village, Sheridan, and others — levy a flat monthly “head tax” on employees who earn above a monthly threshold. It has both an employee and an employer portion (in Denver, $5.75/month from the employee and $4.00/month from the employer). Aurora repealed its OPT in 2025.
How Payrollix handles it
Payrollix calculates each of these automatically for employees in the relevant state or city — ETT on California employers, the Child Care Contribution on Vermont wages, MBT for Nevada at quarter-end, the TriMet and Lane taxes by Oregon work district, and OPT for the Colorado cities that levy it. They are exactly the kind of state-specific detail that is easy to miss by hand, so we build them in rather than leaving them to catch later.
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