Nevada employers must align their payroll practices with state law to ensure that they pay employees properly and comply with legal requirements.
In this guide, I break down every Nevada payroll law you need to know about as you set up your business and prepare to pay employees in Nevada.
Nevada State Income Tax
Unlike most states, Nevada doesn’t have a state income tax, which would typically be withheld from employee paychecks and filed and paid to the state by the employer.
Nevada also doesn’t have any jurisdictions that impose local income taxes, so employers are not responsible for withholding any state or local tax on Nevada employees.
Nevada Unemployment Insurance Tax
Although Nevada doesn’t have withholding taxes, it does impose a state unemployment insurance tax on any employer that pays at least $225 in wages in a quarter. The state unemployment insurance tax helps support Nevada’s unemployment program for workers. This is paid directly by the employer and not withheld from employee paychecks.
New employers in Nevada are taxed at 2.95%. After becoming established, the state designates a new tax rate, which is reviewed and updated each year. The tax rate can range from 0.25% to 5.40%.
Nevada’s wage base for state unemployment insurance tax in 2024 is $40,600, meaning that employers pay this tax only on the first $40,600 an employee earns in the calendar year.
So an employer would pay the tax on $40,600 for an employee earning $60,000 a year but would only pay tax on $30,000 for an employee making $30,000 a year.
Employers required to pay unemployment insurance tax in Nevada must register online with the Nevada Unemployment Insurance Employer Self Service (ESS). Employers also use this system to file and pay their taxes electronically.
Nevada requires filings every quarter for any registered employer, even if they did not pay any wages during that quarter.
Nevada Minimum Wage
Nevada currently has two minimum wage rates designating the minimum amount an employer must pay their employees per hour:
- $10.25 per hour if the employer offers qualifying health insurance
- $11.25 per hour if the employer doesn’t offer qualifying health insurance
Nevada defines qualifying health insurance as a plan that’s available to both the employee and their dependents and doesn’t exceed 10% of the employee’s gross wages from that employer.
The minimum wage increases to $12 for all employees beginning July 1, 2024.
Unlike many states, Nevada doesn’t allow tipped employees to receive a lower minimum wage than standard employees. Tipped employees must earn at least minimum wage with no reduction for their tips.
Nevada requires employers to pay overtime pay to employees if either of the following situations exist:
- If the employee doesn’t earn at least 1 ½ times Nevada’s minimum wage rate, the employer must pay overtime at 1 ½ times the employee’s regular rate if the employee works more than eight hours in a 24-hour period or over 40 hours in a week.
- If the employee does earn at least 1 ½ times Nevada’s minimum wage rate, the employer still needs to pay overtime if the employee works more than 40 hours in a week.
Nevada is unique in that it’s one of only four states with a daily overtime law, meaning that it requires overtime payments for excess hours worked in one day. In contrast, most states only calculate overtime hours based on weekly hours worked.
Nevada Pay Frequency
Nevada requires employers to pay employees at least twice per month. Therefore, semimonthly, biweekly, or weekly pay is okay, but monthly pay is not.
When setting up your payroll, be sure to tailor your process to one of these pay frequencies to align with Nevada payroll laws. Reference NRS 608.060 for the full legislation on pay frequency and exceptions in Nevada.
Nevada Termination Pay Requirements
Nevada has two requirements for how employers must pay employees who quit or are fired.
Employees who voluntarily quit their jobs must get paid on their regular next pay date following the day they quit or within seven days of them quitting their job, depending on which comes first. If an employee gets fired, the employer must pay the employee their owed wages within three days.
So, you’ll need to be prepared to run an additional payroll for terminated employees in some cases.
Breaks for Nevada Employees
When you have employees in Nevada, you’ll need to ensure that they get the breaks the state requires.
Nevada makes it mandatory for employers to provide an uninterrupted 30-minute meal break for anyone who works for eight hours consecutively. Additionally, employees are entitled to a 15-minute rest break for each four continuous hours they work.
Employees working less than seven continuous hours but more than 3 ½ continuous hours can also qualify for one 10-minute paid rest break during their shift.
Although meal breaks don’t need to be paid, rest breaks do. Employees aren’t required to clock out for rest breaks, so they’ll count toward regular work hours. You don’t need to count an unpaid meal break toward an employee’s amount of hours worked.
Only some employees are excluded from this legislation noted in NRS 608.019, including sole employees of a business and those involved in a collective bargaining agreement.
Employee Records in Nevada
Nevada employers are required to maintain records for each employee they hire for at least two years after recording the information. Each record needs to include the employee’s gross wages, net wages, total hours worked, deductions, and pay dates.
Employees can request their records at any time, and employers are required to give the employee the requested records within 10 days.
Now That You Know the Laws, Here’s How to Make Nevada Payroll Easier on Yourself
Knowing and understanding Nevada payroll laws is the first step toward managing your payroll correctly. You want to make sure you’re complying with each law your business is required to follow to ensure that your employees get paid properly and that you aren’t skirting any important rules along the way.
The easiest way to keep track of everything is to invest in payroll software instead of running and managing payroll manually. Payroll software is programmed to adhere to state laws, so it can help make sure you’re calculating and paying overtime correctly, paying employees frequently enough, and paying the correct amount of unemployment insurance taxes.
You’ll still need to make sure you’re following other laws, like termination pay requirements and maintaining employee records. But the right payroll software can send you reminders for those important tasks while taking other payroll tasks off your hands entirely.