From new hire reporting to pay frequency, we’ll cover all the payroll laws you need to know if you’re an employer in Louisiana. Just keep in mind that this guide covers state payroll laws, not federal ones. See our guide to federal payroll forms to find out which federal forms apply to your business.
1. New Hire Reporting
As in the rest of the United States, all Louisiana employers must report newly hired—or rehired—employees within 20 days of the person’s start date. This is because of the Federal Responsibility and Work Opportunity Reconciliation Act (PRWORA).
Signed into federal law in 1996, PRWORA adds teeth to state child support enforcement programs. It allows state child support agencies to track non-custodial parents. They can then get court orders that require employers to take child support payments out of paychecks and forward them to the correct agency. That way, the children and their caregivers get the support they’re owed.
Act 97 of the 1997 Louisiana Legislative Session further clarifies that Louisiana employers must report all new hires to the Louisiana Department of Children & Family Services (DCFS), Child Support Enforcement.
For each new hire, you need to provide the state with the following details:
- The employee’s name, address, occupation, and Social Security number (SSN)
- The employer’s name, address, and federal employer identification number (FEIN)
Louisiana gives employers several different options for reporting this information, including by phone, fax, or mail. But the best place to do it is through the state’s online portal: the Louisiana Directory of New Hires.
This DCFS tool will allow you to register as an employer and securely report new employees as soon as you hire them. And that’s really when you should do it. That way, you won’t stress out about it—or miss the deadline, which can result in a $25 fine if the state believes it was unintentional. If the state thinks you and the employee conspired to avoid the new hire reporting rule, you could get slapped with a $500 fine.
It’s especially important to stay on top of new hire reporting if you plan to hire a bunch of employees, whether that’s right away or in the next several months. The more employees you have, the more confusing it can get to manage all those staggered deadlines.
2. State Income Taxes
Before you do any taxes related to your business, register for a Louisiana Taxpayer Access Point (LaTAP) account. You’ll need several pieces of information before you get started:
- The business’s legal name, location, and mailing address
- Federal employment identification number (FEIN)
- Charter Number if you’re a Louisiana corporation
- Names, social security numbers (SSNs), and addresses of the company’s owners, officers, or partners
- Email address where documents will be sent
Make sure you have all of this information ready before you start. The application must be filled out in one go—you can’t save it and come back to it later. But once you’re set up on LaTAP, you can manage all your state income tax responsibilities online.
Louisiana levies a graduated state income tax with a rate that ranges between 1.85% and 4.25%. The breakdown is fairly simple. For anyone filing single, married but separately, or head of household, it looks like this:
- 1.85%: $12,500 or under
- 3.50%: $12,501-$50,000
- 4.25%: over $50,000
The income brackets double for anyone filing jointly. You can see a more detailed breakdown of Louisiana’s income tax laws on the Louisiana Department of Revenue’s Individual Income Tax page.
3. Business Taxes
Louisiana also charges a corporation income tax and a franchise tax.
The corporation income tax applies to any corporation or entity that is taxed as a corporation for federal tax income purposes. If your corporation makes any income from Louisiana-based sources, you’re subject to the tax, which is charged as follows:
- 3.5% percent on the first $50,000
- 5.5% percent on the next $100,000
- 7.5% percent on the excess over $150,000
If you are an S corporation or a pass-through entity approved for Pass-through Entity Tax Election under LA R.S. 287.732.2, you get to pay a slightly lower rate:
- 1.85% percent on the first $25,000 of net income
- 3.5% on the next $75,000
- 4.25% on the excess over $100,000
All returns and payments are due on or before the 15th day of the fifth month following the end of an accounting period. For the calendar year, that would be May 15.
Now for the state’s corporation franchise tax. Unless a corporation is exempt under R.S. 47:608, any corporation or entity federally taxed as a corporation must pay the tax if it:
- Was organized under Louisiana law
- Is qualified to do business in Louisiana or is doing business in the state
- Exercises or continues the corporate charter within the state
- Owns or uses any plant, corporate capital, or other type of property in the state—even if it’s owned through a joint venture or partnership
Importantly, some LLCs must pay corporation franchise tax too. Say you’re an entity taxed as a corporation under 26 U.S.C. Subtitle A, Chapter 1, Subchapter C for federal income tax purposes.
We’ll say you also meet the criteria we just listed above. You must pay the franchise tax unless you meet one of two specific exemptions. See these exemptions on the Department of Revenue’s Corporation Franchise Tax page.
For the 2023 tax year and going forward, the franchise tax is $2.75 for each $1,000 or major fraction over $300,000 of capital employed in Louisiana.
The beginning corporation franchise tax is $110. You’ll file your very first return on or before the 15th day of the third month after your corporation first becomes liable for this tax. After that, you’ll pay it on the 15th day of the fifth month after the close of an accounting period.
For more information, see the instructions for Form CIFT-620. But if you’re a big enough business to need to pay the corporation or franchise taxes, you’ll want to work with a tax pro who can guide you through it all.
See the full breakdown of Louisiana’s business taxes and rules on the Department of Revenue’s Corporation Income & Franchise Taxes. Check the Businesses page to see if you owe some of the less common taxes, like those levied by the New Orleans Exhibition Hall Authority (NOEHA).
4. Sales and Use Taxes
This one isn’t directly tied to payroll, but it’s still stuff you need to know if you want to do business in Louisiana, so we included it in this list. If this doesn’t apply to you, though, you can skip straight to #5.
While you don’t have to pay sales and use taxes yourself, you do need to collect them if you qualify as a dealer under R.S. 47:301(4). In general, you qualify as a dealer if you:
- Rent, sell, or lease tangible personal property in the state
- Furnish taxable services, like lodging, amusement park tickets, and telecommunications services
- Hold property for resale
- Have a business location in Louisiana
- Operate in Louisiana through full- or part-time salespeople or agents
- Keep an inventory in the state of personal property for rent or lease
If you qualify, apply for a sales tax certificate on LaTAP. Once you have that, you can collect taxes from customers, remit the money to the state, and file returns with the Department of Revenue.
The sales tax rate is 4.45% for most goods and services, but double-check this detailed tax table before you start withholding.
All sales taxes and returns are due by the 20th of the month after the end of a calendar month or quarter—whichever matches up with your reporting period.
Most businesses must file monthly. You can only file quarterly if your sales tax liabilities average less than $500 per month after you file six returns. And even then, you must apply to file every quarter instead of every month.
Finally, keep in mind that Louisiana municipalities can charge their own sales taxes, too. In New Orleans, there’s an Orleans Parish sales tax of 5%. This brings the total sales tax in the Orleans Parish up to 9.45%.
And if you happen to be doing business in the French Quarter, you can add another 0.245% to that.
Other big cities and parishes in Louisiana, like Baton Rouge, Shreveport, and Lafayette levy local taxes too.
Make sure you get familiar with the local sales and use taxes wherever you’re doing business in the Pelican State.
5. Unemployment Insurance Taxes
Another type of tax to get familiar with in Louisiana is unemployment insurance (UI). Most Louisiana employers must pay UI taxes on a portion of each employee’s income.
The rate could be anything from 0.09% for employers with a positive reserve ratio to 6.20% for those with a negative one. The taxable wage base is $7,700 per employee in 2024. New employers will pay the average rate for employers in their industrial classification. See the full tax rate table here, and the explanation for the reserve ration system here.
To get started, apply for a Louisiana Unemployment Employer Account. All employing units in Louisiana must take this step to get an official determination of liability or non-liability under the Louisiana Employment Security Law. If you’re liable, you’ll receive an unemployment tax employer account number (EAN).
You’ll need this for the next step: registering as an employer on the Louisiana Wage and Tax System (LaWATS) portal. This is the Louisiana Workforce Commission’s one-stop shop for all things UI tax.
As an employer in the Louisiana, you’ll need to submit wage reports every quarter. Reports and payments are due within 30 days after the final day of the quarter in question. So, for Q1—January through March—the due date would be April 30.
6. Worker’s Compensation
If you have just one employee, you must carry worker’s compensation insurance for that employee in Louisiana. This is true whether the person works full-time, part-time, or seasonally.
There are a few exceptions to this rule. Railroad workers, musicians, and employees of private residences may not need worker’s comp. Not sure whether you need to get insurance for your employees? Double-check with the Office of Workers’ Compensation at (800) 201-3362 or by email at WCFraud [at] lwc.la.gov.
There are three different ways to get this insurance:
- Sign up for a worker’s comp policy through a state-authorized private insurer.
- Apply to be a self-insured employer. You must fill out an application with the Assistant Secretary of the Office of Workers’ Compensation to do this.
- Become a member of an approved group self-insurance fund.
No matter which option you choose, it must comply with the rules linked to in the Insurance Company Information section of the Louisiana Workforce Commission’s Workers’ Compensation page.
7. Minimum Wage
Louisiana does not have a state minimum wage law, which means that the minimum wage defaults to $7.25 per hour. This is the federal minimum wage, and it’s incredibly low. For workers who receive regular tips, the minimum wage is even lower—just $2.13 per hour. But if the tips don’t make up the difference to give the employee $7.25 an hour, employers are on the hook for it.
Federal law also allows Louisiana employers to pay employees under the age of 20 just $4.25 an hour for their first 90 consecutive days of work.
Louisiana’s northern neighbor, Arkansas, has a minimum wage of $11 an hour. Over in nearby Florida, the minimum is $12 an hour. These are still low, but they’re closer to a true starting point if you’re looking to pay employees a livable wage.
8. Pay Frequency
The Louisiana Workforce Commission has several important pay frequency laws to pay attention to:
- At the time of hire, employers must tell employees what wages they’ll be paid, the method they’ll be paid, and the frequency of payment.
- Employers must notify employees of any subsequent changes to any pay policies or routines.
- If employers don’t designate paydays, they must default to paying on the first and sixteenth days of the month.
- Anyone in manufacturing, oil, mining, or public service, or who has 10 or more employees, must make full payment to employees no less than twice per month. Paydays should be as close to two weeks apart as possible.
- Pay must include all amounts due for services or labor performed during the payroll period and must be paid no later than the payday immediately after the conclusion of the next payroll period.
- Employers must clearly post a notice provided by the Louisiana Workforce Commission that states, as follows: “Your employer has a duty to inform you at the time of your hire what your wage rate will be, how often you will be paid and how you will be paid, and of any subsequent changes thereto. If your employer should, for reasons within his control, fail to pay you according to that agreement, you must first lodge a complaint with him. If no action is taken to resolve your complaint, you may report the violation to the office of workforce development within the Louisiana Workforce Commission.”
If you fail to follow any of these Louisiana pay frequency laws, you’ll pay between $25 and $250 for each day’s violation. If you violate the laws a second time, you’ll pay those fines and land a stint in prison for at least 10 days.
But as long as you prioritize payroll compliance, you should be fine.
9. Payroll Requirements During Termination
There are specific Louisiana payroll laws to follow when an employee leaves or is terminated. For terminations and resignations, employers must pay the entire amount due to discharged employees on the earlier of these two dates:
- On or before the next regular payday, OR
- No later than 15 days after the date of discharge
The payment must also be made the same way you’ve been paying the employee during their time working with you. However, employers are allowed to mail payments via USPS as long as postage has been prepaid and the envelope is addressed to the employee’s correct and current address.
Louisiana also addresses paid time off (PTO) payouts. PTO will be due to departing employees if the employer’s vacation policy meets two provisions:
- The employee was eligible to accrue PTO, and the employee has indeed accrued it, AND;
- The employee has not taken their accrued PTO or been compensated for it as of their final day of work.
In other words, employers cannot force employees to forfeit vacation pay they’ve already earned under the company’s PTO policy.
If Employee A has 10 hours of accrued PTO at $30 an hour when she resigns, you must include that $300 in her final paycheck.
You can study Louisiana’s final paycheck laws for yourself here.
The Easiest Way to Keep Track of Louisiana Employment Laws
If you’re feeling daunted by the sheer number of laws to follow and registrations to sign up for, we’ve got good news. Payroll software can take care of just about all of it for you. And it can take care of your federal payroll tax responsibilities, too.
Of course, if you search best payroll software services on any search engine, you’ll get an overwhelming list of choices.
That’s why the team at HRAdvice did all the research for you. We researched dozens of payroll software services and settled on 18 excellent options. You can read about each one of them in our guide to the best payroll software and services.
