How does Missouri state income tax and unemployment insurance work in 2026?
Missouri runs a graduated income tax topping out at 4.7% in 2026, phasing down by revenue trigger. Employers also fund unemployment insurance on a $9,000 wage base.
· Missouri, United States guide
Illustration · St. Louis, Missouri
Hire in Missouri and you withhold a graduated state income tax topping out at 4.7% in 2026. That ceiling drops each year a revenue trigger is met, making Missouri one of the few states where the tax burden falls automatically. The first $1,313 of taxable income is taxed at zero.
Two costs you fund on top. Unemployment insurance runs on a $9,000 wage base for 2026, down from $9,500 the year before. Place your hire in Kansas City or St. Louis and you also withhold a 1% city earnings tax, remitted to the city separately. The employer of record model handles all three layers.
Does Missouri have a state income tax in 2026?
Yes. Missouri runs a graduated personal income tax that reaches a top marginal rate of 4.7% in 2026, applied only to taxable income above $9,191. The first $1,313 of taxable income is taxed at zero.
The rate is on a downward path. Missouri cuts the top rate in steps as state revenue triggers are met, so the 4.7% figure is a moving target that has fallen in recent years and is set to keep falling.
You withhold Missouri income tax from each paycheque using Form MO W-4 and the Department of Revenue withholding tables. Missouri is not a zero-rate state, but at 4.7% the ceiling is low by graduated-state standards and falling. Compare that to what you'd pay under Illinois's flat 4.95% state income tax and Missouri's downward trajectory stands out.
Missouri couples its standard deduction to the federal figure. A single filer shields the first $15,750 of income from any Missouri rate; a married couple filing jointly shields $31,500. For lower-paid hires, the effective Missouri rate is close to zero. The 4.7% top bracket only bites on income well above the standard deduction. See also how Missouri's wage and overtime rules interact with base pay when modelling total payroll cost.
What about withholding and the Kansas City and St. Louis earnings tax?
You register with the Missouri Department of Revenue and withhold state income tax on the graduated schedule, filing returns on a monthly, quarterly or annual cadence set by your withholding volume.
On top of state tax, both Kansas City and St. Louis levy a 1% local earnings tax. If your employee works in either city, you withhold that 1% as well and remit it to the city, separately from the state.
Place your hire in Missouri and you withhold a graduated state income tax, topping out at 4.7% in 2026 on income over $9,191. The first $1,313 is taxed at zero. Post the hire to Kansas City or St. Louis and you also deduct 1% city earnings tax on all work performed inside the city limit.
Source: Missouri Department of Revenue, employer withholding tax
The local earnings tax is the line that catches employers who set up Missouri payroll once and stop checking. Kansas City and St. Louis each run their own collection, separate from the state return. A hire living and working in the Kansas City metro on the Missouri side owes the 1%; the same person working from a suburb outside the city boundary may not. Where the work happens decides it, not the address on the employee's W-4.
Because the state rate is graduated and falling while the city rate stays flat at 1%, your total Missouri withholding depends heavily on the postcode. That is a registration and ongoing tracking job, not a one-off setup, and it is precisely why running Missouri payroll in-house adds administrative overhead that compounds as you add hires. Missouri's termination rules and leave picture add further layers to track alongside withholding.
What is Missouri's unemployment insurance wage base and rate for 2026?
Missouri's UI taxable wage base is $9,000 per employee for 2026, down from $9,500 in 2025. You pay unemployment tax only on the first $9,000 of each worker's wages.
New non-profit employers pay a UI rate of 1%. New general-business employers pay a higher new-employer rate set by the state, before moving onto an experience rating capped at 6%.
Missouri adjusts the wage base each year based on the balance of its Unemployment Compensation Trust Fund. A healthier fund produces a lower base, which is why the ceiling fell from $9,500 to $9,000 for 2026. Your per-employee UI cost ceiling dropped this year, not because the legislature cut rates, but because the trust fund recovered. Compare that to neighbouring Kansas's UI wage base if you're evaluating where to locate hires.
You hold your assigned new-employer rate for a set period, then your rate moves to an experience rating driven by your own claims history, capped at 6%. Above the state layer sits the federal one: FUTA applies to the first slice of each employee's wages. Missouri employers in good standing with the state programme receive the standard FUTA credit, leaving an effective federal rate well below the 6% statutory ceiling. The combined state-plus-federal UI math is the same calculation you'd run for any US state covered under the US hiring guide.
What other payroll rules apply to Missouri employees?
You run the full federal stack on Missouri payroll: Social Security and Medicare withholding, federal income tax, and FUTA. Missouri's minimum wage rose at the start of 2026 to a single statewide rate with no tip-credit complication beyond the federal tipped rules.
The leave picture changed sharply for 2026. Voters added a statewide paid-sick-leave mandate, then the legislature repealed it before it had been in force a year, so there is no Missouri paid-sick-leave requirement in 2026.
The sick-leave story is the trap for any employer who copied a Missouri handbook policy in early 2025. Proposition A, passed by voters in November 2024, introduced a statewide earned-paid-sick-time mandate that took effect on 1 May 2025. The legislature then passed HB 567, signed in July 2025, which repealed the paid-sick-leave portion effective 28 August 2025. For 2026 there is no statutory paid sick leave in Missouri. Check your handbook against what Missouri actually requires this year, not what Proposition A said last spring. The full leave picture, including what Missouri does and doesn't mandate, is covered in the Missouri paid family and sick leave guide.
The minimum-wage half of Proposition A survived. The statewide minimum wage stepped up on 1 January 2026 to its scheduled level, but HB 567 removed the automatic annual inflation adjustment due in 2027, so the rate no longer rises with the cost of living by default. That makes the wage floor something to recheck annually rather than assume stays current. Missouri has no state paid-family-leave programme and no state disability insurance. Federal FMLA, which job-protects leave at employers with 50 or more employees, is the only family-leave layer above the federal floor. Social Security disability covers long-term disability through the federal programme. For wage details and minimum pay rules, see Missouri wage, overtime and meal break law.
How Teamed runs Missouri payroll end to end
Teamed becomes your legal employer of record in Missouri for from $599 per employee per month flat. Zero FX mark-up. Statutory employer cost passes through itemised on every invoice.
You hire the person. Teamed registers with the Missouri Department of Revenue and the Department of Labor, runs graduated state withholding, handles any Kansas City or St. Louis earnings tax, and files unemployment insurance. Everything runs on one platform.
Real HR and legal experts handle your Missouri hires and know the graduated withholding schedule, the $9,000 UI wage base, and which city earnings tax applies to which postcode. An actual person, not a chatbot or a pooled queue. You see every cost: state withholding, the local earnings tax where it applies, 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, and entity graduation all live on one platform. A Missouri contractor who converts to W-2 keeps their record, and that same employee can graduate to your own US entity without switching systems. Because the 4.7% top rate is falling and the withholding burden is moderate, the cost crossover arrives at a different headcount than in a high-tax state like Illinois or California. Use the Crossover Calculator to see the month the model flips for Missouri headcount. EOR is the right model, until it isn't. Run the Employer Cost calculator to see the full Missouri cost before you commit.
Missouri is the state where the handbook beats the statute. A paid-sick-leave mandate arrived on a ballot, took effect, then was repealed inside the same year. We see employers still running the old policy because nobody told payroll the law changed. The income tax is falling, the sick-leave rule is gone, and the city earnings tax is easy to miss. Check what your policy actually has to do this year, not last.
Missouri voters passed a paid-sick-leave law in 2024. It took effect. Then the legislature repealed it before it was a year old.
If your handbook copied that rule in January, the law you wrote down may already be gone, while the city earnings tax you skipped is still due.
Knowing which Missouri rule is live this year is the part we run for you.
