Virginia Payroll Compliance Guide 2026

Virginia has been one of the more active states for labor law changes over the past five years. A multi-year minimum wage increase schedule brought the rate to $15.00 per hour in 2026. A 2024 pay transparency law added a disclosure obligation for employers when applicants or employees ask about compensation. The income tax structure remains a four-bracket graduated system that has been in place for decades — straightforward to administer but requiring bracket calculations that vary by employee income level.

Virginia's SUI wage base of $8,000 is low compared to states like Utah or Washington, which keeps the employer-side SUI exposure relatively modest. The new employer rate of 2.73% on $8,000 caps annual cost at $218.40 per employee during the new-employer period.

Virginia Payroll Obligations at a Glance

State Unemployment Insurance (SUI)

Virginia's SUI program is administered by the Virginia Employment Commission (VEC). SUI is an employer-paid tax; Virginia employees do not contribute to state unemployment insurance.

SUI Rates for 2026

• New employer rate: 2.73% until an experience rating is established
• Experienced employer range: 0.1% to 6.2%, assigned annually by the VEC
• Taxable wage base: $8,000 per employee per calendar year
• Maximum annual SUI cost per employee (at 6.2%): $496
• New employer annual cost per employee (at 2.73%): $218.40

Virginia uses a reserve ratio experience rating system. Your rate reflects the balance of your unemployment trust account divided by your average taxable payroll. Employers who maintain positive balances — paying more in premiums than generating in claims — earn lower rates over time. The VEC sends annual rate notices; confirm your assigned rate before the first payroll of each year.

FUTA Credit and Virginia SUI

Virginia employers who pay SUI on time receive the standard 5.4% FUTA credit, reducing the effective FUTA rate to 0.6% on the first $7,000 per employee. Virginia has maintained a solvent trust fund. Check the IRS FUTA credit reduction list each November to confirm.

State Income Tax: Graduated Brackets

Virginia uses a four-bracket graduated income tax structure that has remained largely unchanged since the late 1980s. The brackets are not inflation-indexed, which means a growing share of Virginia workers pay at the top rate over time as nominal wages rise.

Virginia Income Tax Brackets (2026)

Because the $17,000 threshold for the top 5.75% bracket is so low, most full-time employees in Virginia pay at or near the top rate for most of their wages. An employee earning $50,000/year has $33,000 above the top bracket threshold. Employers should configure withholding to reflect this bracket distribution accurately.

Withholding Mechanics and Form VA-4

Virginia's employee withholding form is Form VA-4 (Virginia Employee's Withholding Exemption Certificate). New employees complete a VA-4 at hire. The form captures filing status, personal and dependent exemptions, additional withholding, and exemption claims.

• Personal exemptions: Each exemption reduces the annual income subject to withholding by $930 (2026 figure; verify with the Virginia Department of Taxation)
• Dependent exemptions: Additional exemptions reduce the withholding base further for each qualifying dependent
• Additional withholding: Employees may request a flat additional dollar amount per pay period
• Exemption: Available only to employees who had no Virginia tax liability in the prior year and expect none in the current year

Employers who do not receive a VA-4 must withhold as if the employee is single with no exemptions. Virginia does not allow employees to reduce withholding below what a single filer with zero exemptions would owe.

No Local Income Taxes in Virginia

Virginia municipalities and counties cannot levy local income taxes. Employers in Virginia operate with a single state withholding account regardless of number of locations. This is a meaningful simplification for employers with employees in multiple Virginia cities.

Minimum Wage in Virginia 2026 — $15.00/hr

Virginia's minimum wage reached $15.00 per hour effective January 1, 2026 under Virginia Code § 40.1-28.10. Virginia's phased minimum wage schedule has been one of the most significant employer-side labor law developments in the state's recent history:

Employers who have been on the federal $7.25 floor need to confirm they have been tracking and implementing each increase. The $15.00 rate is the current floor; future increases above $15 may require additional legislation. Monitor the Virginia Department of Labor and Industry at doli.virginia.gov for any updates.

Tipped Employees

Virginia follows federal FLSA rules for tip credits. Tipped employees may receive a cash wage of $2.13 per hour provided tips bring total hourly compensation to at least $15.00 per hour (Virginia's current minimum). When tips are insufficient in any workweek, the employer must make up the difference so the employee receives the full $15.00 minimum for every hour worked.

Agricultural Workers

Virginia's minimum wage applies to agricultural workers, which is a broader coverage than the federal FLSA provides for farm workers. Virginia employers with agricultural employees should confirm coverage under Virginia Code as well as the FLSA.

Overtime Rules

Virginia follows federal FLSA overtime standards. Non-exempt employees must receive at least 1.5 times the regular rate for hours over 40 in a workweek. Virginia has no state overtime law that goes beyond FLSA requirements. The workweek is the governing unit for overtime, and employers may define the workweek start day as any day of the week.

Pay Frequency and Final Paycheck Rules

Pay Frequency

Virginia Code § 40.1-29 requires employers to pay wages at least semi-monthly (twice per month). The pay period cannot exceed 16 days for semi-monthly payrolls. Employers may pay more frequently; many Virginia employers pay bi-weekly, which satisfies the semi-monthly floor. The payment date must be a designated, regular payday established in advance.

Final Paycheck Rule

Virginia requires that a departing employee's final wages be paid no later than the next regular payday following separation. This applies to resignations and terminations. Virginia does not require same-day or next-day final payment, which gives employers one full pay period to process the final check and close out any deductions.

Virginia Pay Transparency Law (2024)

Virginia enacted pay transparency requirements in 2024. Under these provisions, employers must provide the pay range or salary range for a position when:

• An applicant asks for the pay range during the application or interview process
• A current employee asks for the pay range for their current position or a position they are applying for internally

The employer is required to provide the pay range in good faith — meaning the disclosed range should reflect what the employer genuinely considers for the role, not an artificially broad range designed to avoid disclosure. Virginia's law does not require proactive disclosure in job postings (unlike Colorado or New York City), but mandates disclosure on request.

Employers operating in Virginia should train recruiters and managers on this obligation. An applicant who asks "what does this job pay?" is legally entitled to an answer. Refusing to provide a range or providing a misleading range can expose the employer to a Virginia Department of Labor and Industry complaint.

No State Paid Family Leave

Virginia does not have a state-mandated paid family leave program as of 2026. Legislation has been introduced in the Virginia General Assembly to establish a PFL program, but no mandatory private-sector program has been enacted. Virginia employers are subject to the federal FMLA, providing 12 weeks of unpaid, job-protected leave per year for eligible employees at covered employers (50+ employees within 75 miles).

New Hire Reporting

Virginia employers must report all new hires and rehires to the Virginia New Hire Reporting Center within 20 days of the employee's first day of work. The report must include the employee's name, address, and Social Security number, date of hire, and the employer's name, address, and federal EIN.

Virginia accepts reports online at newhire.dss.virginia.gov, by mail, or by fax. Employers reporting 25 or more employees in a quarter must file electronically.

Employer Registration in Virginia

Virginia Department of Taxation — Withholding Account

Register for Virginia income tax withholding through the Virginia Tax Business Registration portal at business.virginia.gov. You receive a Virginia withholding account number (also called a FEIN suffix account). Deposit frequency is assigned based on withholding volume.

Virginia Employment Commission — SUI Account

Register for unemployment insurance at vec.virginia.gov. Online employer registration with your federal EIN. You receive your Virginia employer account number and initial 2.73% SUI rate.

Workers Compensation

Virginia requires workers compensation insurance for employers with two or more regular, part-time, or full-time employees. Coverage is obtained through licensed private carriers. Virginia does not operate a state workers compensation fund. Sole proprietors with no employees are not required to carry coverage but may elect it.

Filing Schedules and Deadlines

State Withholding — Virginia VA-5 and Annual Reconciliation

Virginia withholding returns are filed using Form VA-5 (monthly or quarterly) or VA-15/VA-16 (semi-weekly). The Virginia Department of Taxation assigns your deposit frequency based on withholding volume:

Quarterly Deadlines (VA-5)

SUI — VEC Quarterly Wage Report

Virginia SUI is reported quarterly through the VEC employer portal. Per-employee wage detail is required. Same quarterly due dates as withholding. Electronic filing is required for employers with 50 or more employees.

Annual W-2 Filing

Virginia W-2s must be distributed to employees and filed with the Virginia Department of Taxation by January 31. Employers with 50 or more W-2s must file electronically. W-2s must reflect Virginia withholding and the Virginia withholding account number.

Federal Payroll Taxes

Virginia state payroll taxes are in addition to federal obligations:

• Social Security (OASDI): 6.2% employer + 6.2% employee on wages up to $176,100 (2026)
• Medicare: 1.45% employer + 1.45% employee on all wages (plus 0.9% Additional Medicare Tax on wages over $200,000)
• FUTA: 6.0% on first $7,000, reduced to 0.6% with the full state UI credit
• Federal income tax withholding: Based on the employee's W-4 elections
• Form 941: Quarterly federal payroll tax return due April 30, July 31, October 31, and January 31

Frequently Asked Questions

What is Virginia's SUI rate for new employers in 2026?

New Virginia employers pay 2.73% on the first $8,000 per employee per year. Maximum annual cost at 2.73%: $218.40 per new employee. Experienced employers receive VEC-assigned rates between 0.1% and 6.2% based on their unemployment claims history.

What are Virginia's income tax brackets in 2026?

Virginia's four brackets: 2% (first $3,000), 3% ($3,001–$5,000), 5% ($5,001–$17,000), 5.75% (over $17,000). Most full-time employees pay at 5.75% on the bulk of their wages because the top bracket starts at just $17,000.

What is Virginia's minimum wage in 2026?

Virginia's minimum wage is $15.00 per hour, effective January 1, 2026 under the state's phased schedule. This is the current floor — there are no automatic increases above $15 scheduled. Monitor doli.virginia.gov for any future changes.

Does Virginia require pay transparency?

Yes. As of 2024, Virginia employers must provide the pay range for a position when an applicant or current employee asks for it. This is a disclosure-on-request requirement, not a proactive job posting requirement. Train your hiring managers and HR staff on this obligation.

When must Virginia employers issue a final paycheck?

By the next regular payday following the last day of work. Virginia does not require same-day payment upon discharge. Unauthorized deductions from final pay can trigger Virginia Wage Payment Act liability including liquidated damages and attorney fees.

Does Virginia have paid family leave?

No. Virginia has no mandatory state PFL program as of 2026. Federal FMLA provides 12 weeks of unpaid, job-protected leave for eligible employees at covered employers (50+ employees). No Virginia payroll deductions for PFL are required.