Michigan Payroll Instructions

Payroll Links

Goldenseal Payroll Software Info

US Federal Withholding Tables

Free 2021 Payroll Tax Table Updates

Other Links

Michigan has state income tax withholding, with a flat rate for all tax brackets (after a single deduction). The deduction amount changed for 2021. Most cities in Michigan collect local tax withholding. The base rate is 1% for residents and .5% for non-residents, but some cities have higher rates.

NOTE-- The Michigan website no longer provides a list of city county tax rates, so we have stopped updating them annually. Michigan users should double-check the rates for all localities for which you collect withholding.

Eighteen of the past 31 years have seen withholding rate formula changes. Now that there are increasing numbers of local income taxes for Michigan cities, tax tables are pretty much guaranteed to change, every year.

Click here for more about Goldenseal payroll accounting software.

HINT-- Turtle Creek Software provides free annual updates for our payroll software users, covering the latest US federal and Michigan tax withholding rates.

Michigan State Withholding Instructions

To enter withholding information for an employee in your Goldenseal company file, follow these steps:

  1. Choose Employees from the Accounts menu.
  2. Locate the employee record.
  3. Click the Payroll Setup button.
  4. Enter the employee's marital status into the Marital Status field (see note below).
  5. Choose the correct Tax package for the employee, depending on their place of residence.
  6. Enter the number of federal dependents into the Federal Exemptions field.
  7. Enter the number of Michigan dependents into the State Exemptions field.
  8. If the employee qualifies for any special exemptions, report the number of special exemptions in the Other Exemptions field.
  9. Click OK.

Michigan Local Taxes

If the employee resides (resident) or works (non-resident) in Saginaw, Detroit, Highland Park or an increasing number of other cities, you'll need to set up additional Tax Packages, so they will get withholding for local taxes. There are separate rates for residents and non-residents, so you may also need to create Tax Packages when work is done inside cities that have local taxes.

To create Tax Packages, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Packages from the submenu.
  2. Click on one of the standard packages, then click Duplicate.
  3. Enter a descriptive name for the package (e.g. Saginaw Non-Resident).
  4. Go through the list of Tax Items, and select any local taxes that apply.
  5. Click OK.
  6. Repeat steps 2 to 5 for each locality where you need to collect taxes.

After you have set up additional Tax Packages, apply them to your employees:

  1. Choose Employees from the Accounts menu.
  2. Use the browser controls at upper left, to locate an employee.
  3. Click the Payroll Setup button.
  4. Enter the Tax Package that applies.
  5. Click OK.
  6. Repeat steps 2 to 5 for each employee that needs local withholding.

Michigan State Unemployment Tax Instructions

Michigan charges state unemployment insurance tax on the first $9,000 of wages for each employee (2021 cutoff). The cutoff was originally slated for an increase to $9,500, but the change was delayed because of Covid-19 revenue losses. The starting SUTA tax rate is 2.7% for most businesses, and between 6.8% and 8.1% for construction companies. After the first year the rate is different for each business, depending on past layoff history.

To enter your Michigan SUTA tax rate into the Goldenseal payroll software, follow these steps:

  1. Choose Payroll Setup from the Costs menu, and choose Tax Items from the submenu.
  2. You'll see a list of Tax Items. Locate the Michigan SUTA tax in the list, and double-click on it. HINT: If you don't see Michigan SUTA in the list, you'll need to import your state's payroll info first.
  3. Enter your SUTA percentage rate into the percentage field to the right of Calculation method.
  4. If the cutoff amount has changed, enter it into the dollar field to the right of First Adjustment.

Michigan Marital Status

Enter one of the following values into the Marital Status field on each Employee account:

  • Single- single employee with one personal exemption
  • Married- married employee with two personal exemptions
  • Dual Income- married employee with one personal exemption
  • Head of House- employee claims Head of Family status
  • Other- not used

Michigan Tax Contacts

Withholding tax website

Payroll Tax Office-- 800 487-7000
Forms-- 800 367-6263
Fax On Demand-- 810 754-0362
SUTA-- 517 373-3190

Michigan Dept of the Treasury
430 West Allegan St.
Lansing MI 48956

Official State Lawn Ornament

Lower peninsula-- rusting factory.
Upper peninsula-- sorry, ornament was eaten by mosquitos.