Maryland Payroll Made Easy: Calculations, Forms, and Paycheck Software

Maryland payroll is a critical function for pretty much every employer in the state. You need to protect the positive relationship you’ve nurtured with your employees. You also need to navigate the various federal, state and local payroll laws or else face hefty fines and penalties that can threaten the viability of your company.

Small businesses with few employees will naturally have fewer calculations, paychecks, and filing forms to contend with, but it’s often every bit as important. The few employees that these businesses do have on staff are often the lifeblood of the company. You can’t risk morale with a smaller team in which your company operations will grind to a halt if more than 1-2 employees leave at any one time.

By comparison, large businesses must pay attention to employee morale, but they have an additional risk in which systemic errors to their payroll can lead to huge financial penalties. That’s because these penalties and fines are often assessed per employee and/or per form. And while larger companies may be in a position to withstand these fees, it can still turn an unforced error into a huge loss.

Basic and Specialized Maryland Payroll Info

Both the federal government and the state of Maryland require that most employers regularly track and report a handful of vital employment figures, including wages, payroll taxes, income withholding, and certain other payroll adjustments and paycheck information. Health insurance information may be mandatory for large employers and their ACA/Form 1095 requirements. You may also be required to withhold and report wage garnishments for employees with certain types of longstanding debt.

Income Tax Withholding Info

Maryland doesn’t assess a payroll tax, but it does have an income tax for employees. And except in rare cases, employers will withhold these income taxes so the employee isn’t stuck with a huge bill at the end of the year. The state also requires employers that do withhold income tax to report and deposit these funds with the state on a regular basis (monthly or quarterly, depending on the size of the firm). This process is primarily handled by Form MW-506, but there are a few others you’ll need to be aware of along the way. You can find more information here for Maryland withholding forms.

Maryland Unemployment Insurance

Another big and compulsory part of Maryland payroll is the unemployment insurance tax. In 2017, this tax rate fell between 2.6-7.0 percent for state businesses. The state’s Unemployment Insurance Trust Fund calculates the range of tax rates each year to keep the Trust Fund and unemployment insurance program financially sound, while the employer’s individual tax rate within this range is based on their company’s employment history. You can read more about Maryland unemployment insurance forms and rates here.

Maryland Payroll Support from AMS

If you’re consistent and accurate with your payroll and you prefer to e-filing, then you may be able to handle all your payroll calculations and information reporting with our

  • W2 & 1099 Software
  • platform and the AMS Payroll Software system. However, if you need to file corrections or if you need to prepare the paper form copies of Maryland’s income withholding forms, then you may also need our auxiliary software module, the AMS Forms Filer Plus. You can see all the state forms and which software products support which forms through this chart of state forms.

    Software Solutions from AMS

    Our W-2 and 1099 Forms Filer is our only required platform. From there, users pick the services they need. Choose from the tools below to build out your customized accounting software.