Kentucky Payroll Tax and Labor Laws

Get your Kentucky State Tax ID Number 

Click HERE to obtain State Tax ID  

Click HERE to obtain State Unemployment Tax ID  

Kentucky Wage and Hour Laws 

Minimum Wage 

Kentucky follows federal minimum wage rates which is currently set at $7.25 per hour. 

Overtime 

Kentucky overtime law requires covered employers to pay employees at a rate of one and one-half times the employee’s hourly wage rate for all hours worked in excess of 40 hours in a work week.   

Employees who work seven days in any one work week are entitled to overtime pay at a rate of time and one-half for hours worked on the seventh day, except for those employees prohibited from working over 40 hours total in a workweek.  

For more information on Kentucky’s overtime law, including information on exemptions, please click HERE.  

Kentucky Unemployment 

Taxable Wage Base                                            $11,400 

New Employer Rate (% Taxable Wages):      2.7% New Employer (includes 0.075% SCUF surcharge), Construction 9.0% (includes 0.075% SCUF surcharge)

"Service Capacity Upgrade Fund (SCUF) will remain in place for 2024 at .075%. The surcharge will not increase the amount of tax owed by employers. Instead, 2024 unemployment rates will be reduced by .075%. For more information on SCUF rates click HERE."

Kentucky Income Tax Withholding 

Kentucky's law requires employers to withhold state income tax from employees' wages and remit the amounts withheld to the Department of Revenue.  

Any employer required to withhold federal income taxes is also required to withhold Kentucky state income taxes, including agricultural employers. Certain corporate officers and officers of limited liability companies may be held personally liable for taxes that are required to be withheld from wages paid to employees of the corporation.  

Kentucky State Resources 

Kentucky Department of Revenue  

Kentucky Labor Cabinet  

Kentucky Career Center – Unemployment Services   

Kentucky SUI Rate  

Under reciprocal tax agreements, residents of certain states who work in Kentucky are not subject to withholding of Kentucky income tax if these states grant an exemption from the withholding of their income tax to Kentucky residents who earn income in these states. Kentucky has entered into such agreements with Illinois, Indiana, Michigan, Ohio, West Virginia, and Wisconsin. In addition, employees who reside in Virginia and commute daily to employment in Kentucky, or who reside in Kentucky and work daily in Virginia, are not subject to Kentucky withholding. Reciprocal agreements may vary from year to year as state laws change.  

SurePayroll, Inc. and its subsidiaries assume no liability and make no warranties on or for the information contained on these state payroll pages. The information presented is intended for reference only and is neither tax nor legal advice. Consult a professional tax, legal or other advisor to verify this information and determine if and/or how it may apply to your particular situation.  

This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.  

Revised 1/1/2024