--- title: "Mississippi Payroll 2026: 4% Income Tax & UI" description: "Mississippi runs a flat 4% income tax in 2026, falling each year toward zero, plus a $14,000 UI wage base. Teamed EOR guide." canonical: https://www.teamed.global/country-hiring-guides/united-states/mississippi/state-income-tax-and-unemployment-insurance --- United States · Mississippi · State tax child Served by Teamed US Inc., Delaware · Payroll via SUNA Solutions # How does *Mississippi state income tax and unemployment insurance* work in 2026? Mississippi runs a flat 4% income tax in 2026, and it is scheduled to fall every year toward elimination. Unemployment insurance sits on a $14,000 wage base at a 1% new-employer rate. Last reviewed 6 June 2026 · Mississippi, United States guide ![Downtown Jackson, Mississippi in warm afternoon light: the State Capitol dome and low-rise office buildings above tree-lined streets under a clear southern sky.](/cluster-assets/country-hiring-guides/united-states/mississippi/state-income-tax-and-unemployment-insurance/images/hero.webp) Illustration · Jackson, Mississippi Mississippi is one of the more interesting payroll states to watch right now, because the headline number is moving. The state carries a **flat income tax of 4%** in 2026, applied only to taxable income above the first exempt slice, and the legislature has put that rate on a legislated path to zero. [US payroll](/country-hiring-guides/united-states) has plenty of complexity, but Mississippi is actively simplifying. The rest is light. Unemployment insurance runs on a **$14,000 wage base** at a new-employer rate of **1%**, roughly $140 per employee a year. There is no state minimum wage, so the federal $7.25 floor applies, and no state paid-leave mandate. Compare that picture with [Louisiana's UI costs](/country-hiring-guides/united-states/louisiana/state-income-tax-and-unemployment-insurance) to see how much the neighbouring state stacks. ## Does Mississippi have a state income tax in 2026, and is it really being cut? Yes to both. Mississippi has a **flat state income tax of 4%** in 2026, charged on taxable income above the exempt first slice, and the legislature has put it on a path to zero. The 2024 rate was 4.7% and the 2025 rate was 4.4%. Under the 2025 reform, the rate falls to 3.75% in 2027, 3.5% in 2028, 3.25% in 2029, and 3% in 2030, with revenue triggers steering it lower after that. This is the part that catches out-of-state employers running a payroll model from last year. The Mississippi rate is not fixed, it is on a glide path, so a withholding figure that was right in 2024 at 4.7% is wrong for 2026 at 4%. You re-base the withholding tables each January, not once and forget. The [Mississippi Department of Revenue](https://www.dor.ms.gov/individual) publishes updated withholding tables at the start of each year, so the source of truth is always current. Mississippi is a flat-tax state, so there are no brackets to apply by salary band: one rate hits all taxable income above the exempt threshold. After 2030, further cuts depend on whether state revenue clears a set growth bar, which means the trajectory is real but the exact year the tax reaches zero is not yet fixed in law. For a planning horizon, treat the rate as falling and the after-2030 timing as uncertain. If you are also hiring in [Alabama](/country-hiring-guides/united-states/alabama/state-income-tax-and-unemployment-insurance), that state runs graduated brackets rather than a flat rate, making Mississippi the simpler withholding calculation of the two. ## How does Mississippi income tax withholding work for employers? You register with the Mississippi Department of Revenue, collect a state withholding certificate from each employee, and withhold at the current flat rate, which is **4%** for 2026 on taxable wages above the exempt amount. Returns are filed through the Department of Revenue's online portal, with an annual reconciliation that matches your withholding to employee W-2s. There is no county or city income tax to layer on top. Mississippi Dept of Revenue · Individual income tax Withhold at **4%** on every dollar of taxable wages above the exempt first slice. Your employee's standard deduction reduces the base before the rate bites: **$2,300** for a single filer, **$4,600** filing jointly. No county or city income tax layers on top. Source: [Mississippi Department of Revenue, individual income tax](https://www.dor.ms.gov/individual) The job is keeping the rate current. Because the flat rate steps down each year, your payroll system needs the 2026 value of 4% now and the 3.75% value ready for next January. Get that wrong and you either over-withhold, annoying the employee, or under-withhold, leaving them with a January bill. Register and file through the [Department of Revenue's employer withholding portal](https://www.dor.ms.gov/business/pages/withholding-tax.aspx). Standard deductions and personal exemptions reduce the taxable base before the rate applies, so two employees on the same gross can owe different Mississippi tax depending on filing status and dependents. That is normal flat-tax mechanics: one rate, but a base that varies per person. See how Mississippi's approach compares with the [wages and overtime rules](/country-hiring-guides/united-states/mississippi/wage-overtime-and-meal-break-law) for the full payroll picture. ## What is Mississippi's unemployment insurance wage base and rate for 2026? Mississippi's UI taxable wage base is **$14,000 per employee** for 2026, the same as 2025. New employers pay a rate of **1%** in the first year of liability. That is a maximum of about **$140 per employee a year** while you hold the new-employer rate. Experience-rated employers pay anywhere up to **5.4%** based on their own claims history. UI runs through the [Mississippi Department of Employment Security](https://mdes.ms.gov/employers/unemployment-tax/reporting-and-filing/). You pay UI on the first $14,000 of each employee's wages in the calendar year; wages above that cap are not subject to UI. With a base this low, the per-employee cost is small and predictable, and far lighter than states such as [Louisiana](/country-hiring-guides/united-states/louisiana/state-income-tax-and-unemployment-insurance) when you factor in total employer payroll cost. You hold the 1% new-employer rate until you qualify for an experience rating, then move to a rate set by how many claims your former staff have drawn. The federal layer sits on top: [FUTA](https://www.irs.gov/businesses/small-businesses-self-employed/federal-unemployment-futa-tax) applies to the first slice of each employee's wages, and because Mississippi is in good standing with the federal fund, you keep the standard FUTA credit and pay the reduced effective rate. For full rate schedules see [MDES unemployment tax rates](https://mdes.ms.gov/employers/unemployment-tax/reporting-and-filing/unemployment-tax-rates/). ## What other payroll rules apply to Mississippi employees? You run the full federal stack: Social Security and Medicare withholding, plus the federal employer match and FUTA. Mississippi has **no state minimum wage**, so the federal floor of **$7.25 an hour** applies to covered employees. Mississippi has no state paid-leave programme and no state disability insurance, so federal FMLA is the only job-protected family leave layer, and there is no state overtime rule beyond the federal one. Mississippi is light on state-specific rules, which is the opposite trap to the income-tax glide path. The federal payroll taxes, [Social Security and Medicare](https://www.ssa.gov/employers), plus FUTA, run exactly as they do everywhere else, and there is no extra state payroll tax bolted on. State law also prevents counties and cities from setting their own minimum wage, so the $7.25 federal floor is statewide. A bill to introduce a state minimum wage was filed in the 2026 session but was not enacted, so nothing changed. See how the wage floor fits into the broader [Mississippi wages and overtime rules](/country-hiring-guides/united-states/mississippi/wage-overtime-and-meal-break-law). There is no state-mandated paid sick leave, no state family-leave insurance, and no state meal-break requirement, so the federal framework is the whole picture in those areas. [Federal FMLA](https://www.dol.gov/agencies/whd/fmla) gives job-protected unpaid leave at employers with 50 or more staff, and that is the only family-leave entitlement your Mississippi hires can rely on by statute. Overtime follows the federal rule of one-and-a-half times pay after 40 hours in a week. For the full leave picture, see [Mississippi paid family and sick leave](/country-hiring-guides/united-states/mississippi/paid-family-and-sick-leave). ## How Teamed runs Mississippi payroll end to end Teamed becomes your legal employer of record in Mississippi for [**from $599 per employee per month flat**](/pricing). **Zero FX mark-up**. Statutory employer cost passes through itemised on every invoice. You hire the person. Teamed registers with the Mississippi Department of Revenue and the [Department of Employment Security](https://mdes.ms.gov/employers/), withholds income tax at the current flat rate, runs unemployment insurance, and re-bases the rate each year as it steps down. Everything runs on **one platform**, covering both [wages](/country-hiring-guides/united-states/mississippi/wage-overtime-and-meal-break-law) and [leave](/country-hiring-guides/united-states/mississippi/paid-family-and-sick-leave). **Real HR and legal experts** handle your Mississippi hires and track the income-tax glide path, so when the flat rate moves from 4% to 3.75% next year your withholding follows it automatically. **An actual person**, not a chatbot or a pooled queue. You see every cost: income-tax withholding, the $14,000 UI contributions, and federal employer taxes **pass through at cost, itemised** and auditable on every invoice. **No setup fee, no exit fee.** Contractor onboarding, [EOR payroll](/lp/employer-of-record), and entity graduation all live on **one platform**: a Mississippi contractor who converts to W-2 keeps their record, and that same employee can **graduate** to your own US entity without switching systems. Because Mississippi has a low UI base and a falling income tax, the per-employee statutory cost is light compared with high-tax neighbours, so the case for your own entity arrives later per headcount. Use the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips, or run the [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost) to see your total Mississippi payroll bill at [from $599 per employee, zero FX](/pricing). EOR is the right model for Mississippi, **until it isn't**. Teamed Legal Operations The mistake on Mississippi is treating the income tax as a fixed number. It is a flat rate on a legislated path to zero, so the right figure changes every January. The employers who get caught are the ones running last year's withholding table. Re-base the rate annually, and the rest of the state is genuinely light. A note from Tom Price-Daniel Most payroll states give you one rate to memorise. Mississippi gives you a moving one. 4% in 2026, legislated to fall every January toward zero. The right withholding figure changes each year. We track the glide path so your payroll never runs last year's number. That is the part we own, on **one platform**. Tom Price-Daniel · Co-founder, Teamed ## Related United States guides - [Mississippi wages and overtime](/country-hiring-guides/united-states/mississippi/wage-overtime-and-meal-break-law)sibling - [Mississippi paid family and sick leave](/country-hiring-guides/united-states/mississippi/paid-family-and-sick-leave)sibling - [Hiring in the United States, overview](/country-hiring-guides/united-states)country parent - [Alabama state tax and UI](/country-hiring-guides/united-states/alabama/state-income-tax-and-unemployment-insurance)cross-state neighbour - [Louisiana state tax and UI](/country-hiring-guides/united-states/louisiana/state-income-tax-and-unemployment-insurance)cross-state neighbour - [Employer of Record overview](/lp/employer-of-record)core - [Pricing, Zero FX Fixed](/pricing)core - [EOR vs Entity Crossover Calculator](https://www.teamed.global/tools/crossover-calculator)tool - [Employer Cost Calculator](https://www.teamed.global/tools/employer-cost)tool - [Talk to an expert](https://www.teamed.global/contact)CTA A note on this page. This is a guide, not legal advice. Mississippi's flat income tax rate steps down on a legislated schedule and is steered by revenue triggers after 2030, and its UI wage base, rate schedule, and employment rules update when the legislature acts or the Department of Revenue and Department of Employment Security issue new figures. Confirm specific numbers with the Mississippi Department of Revenue, the Department of Employment Security, or your Teamed US specialist before relying on any figure here.