A Breakdown of Utah Withholding Tax for Employers

Utah withholding tax is the amount of state income tax an employer sets aside from an employee’s wages. These funds are then paid directly to the Utah State Tax Commission on behalf of the employee. This system of tax collection happens incrementally throughout the year, aligning with each pay period. By collecting the tax as income is earned, it prevents a larger tax burden on the employee when they file their annual state income tax return.

The process is mandatory for nearly all employers paying wages for work performed within the state. The employer acts as a collection agent for the state, bearing the responsibility for accurately calculating, withholding, and remitting the tax. Understanding the requirements set by the Utah State Tax Commission is necessary to maintain compliance and avoid potential penalties.

Employer Registration for a Withholding Account

Any business that pays wages to an employee for services performed in Utah is required to register for a withholding account with the Utah State Tax Commission. This applies whether the employee is a resident or non-resident, as long as the work occurs within state lines. The requirement also extends to employers of Utah residents who work outside the state, though the amount withheld can be reduced by taxes paid to the other state. Certain businesses operating in Utah for 60 days or less may be exempt, but this requires prior approval from the Tax Commission.

The registration process is completed online through the Utah Taxpayer Access Point (TAP) using Form TC-69. An employer must first obtain a Federal Employer Identification Number (EIN) from the IRS before applying. During registration, the employer will need to provide:

• Legal business name
• Entity type
• Physical address
• Contact details

After submitting the application, the business will receive a 14-character withholding tax account number, which ends with “WTH” and is used for all future filings. A separate Personal Identification Number (PIN) is sent via mail and is required to create a full login for the TAP portal. This online account becomes the primary tool for managing all aspects of withholding tax.

Calculating Employee Withholding

The calculation of Utah’s withholding tax begins with the employee’s federal Form W-4, as Utah does not have its own state-specific withholding form. Employers rely on the W-4 for the employee’s filing status, number of dependents, and any other adjustments. Using these details, the employer refers to the official Utah withholding schedules in Publication 14, provided by the Utah State Tax Commission.

This publication contains formulas and tables for different pay periods, such as weekly or monthly. The calculation process involves determining the employee’s Utah taxable wages and applying the state’s flat income tax rate of 4.50% (as of 2025). For example, to calculate withholding for a bi-weekly paycheck, an employer uses the formulas in Publication 14. They would annualize the employee’s gross wages, subtract the appropriate Utah exemption amount based on the W-4, multiply the result by the tax rate, and then divide the final figure back to a bi-weekly amount.

Filing Returns and Submitting Payments

Employers must remit withheld funds and file a corresponding return with the Utah State Tax Commission. Filing frequency is determined by the amount of tax withheld. Businesses withholding $1,000 or more in any month file monthly, while those withholding less file quarterly. The Tax Commission reviews accounts annually and will notify a business if its filing frequency changes.

The primary form for these filings is Form TC-941E, which must be filed electronically through the Taxpayer Access Point (TAP) portal. On TAP, employers can manually enter return information or upload a formatted file. Payments can also be made electronically through TAP via ACH debit or ACH credit.

Quarterly returns are due by the last day of the month following the end of the quarter:

• April 30
• July 31
• October 31
• January 31

Monthly payers must submit their payments by the last day of the following month. A return must be filed for every period, even if no tax was withheld, as long as the account is active.

Annual Reconciliation and W-2 Reporting

Beyond periodic filings, every employer must complete a year-end reconciliation. The purpose is to ensure the total tax reported and paid on Form TC-941E filings matches the total Utah tax withheld on all employee W-2 forms for the year. The annual reconciliation is combined with the fourth-quarter return on Form TC-941E and is due by January 31 of the following year.

This single electronic submission through TAP serves as both the final periodic return and the annual summary. Along with this filing, employers must electronically submit copies of all W-2s that report Utah wages or withholding. The state matches this data against the income tax returns filed by employees.

Employers must also furnish a completed Form W-2 to each employee by January 31. The W-2 must include:

• Total wages paid
• Federal income tax withheld
• Total Utah income tax withheld
• The employer’s Federal EIN
• The employer’s 14-digit Utah withholding account number