See federal withholding, FICA, the graduated Delaware state tax after your DE-W4 allowances, the Wilmington city tax, and the Paid Leave deduction for any pay frequency.
Delaware payroll taxes stack federal taxes with a graduated state income tax, a new paid leave contribution, and, in one city, a local wage tax. Every Delaware paycheck has federal Social Security (6.2%), Medicare (1.45%), federal income tax withholding, and Delaware income tax withheld with the Division of Revenue percentage method: annualized wages minus a $3,250 standard deduction ($6,500 married filing jointly), taxed on a 0% to 6.6% schedule, minus a $110 credit per Form DE-W4 allowance. Most workers also see the employee share of Delaware Paid Leave (up to 0.4% of wages since 2025), and Wilmington residents and Wilmington workers pay a 1.25% city earned income tax. There is no employee unemployment contribution; employers pay unemployment on the first $14,500 of each worker's wages for 2026.
- Delaware income tax is graduated: 0% on the first $2,000 of taxable income, then 2.2%, 3.9%, 4.8%, 5.2%, 5.55%, and 6.6% above $60,000. The schedule has applied since 2014.
- Withholding annualizes the wage, subtracts a $3,250 standard deduction ($6,500 married filing jointly), applies the schedule, and then subtracts a $110 credit for each Form DE-W4 allowance.
- A Delaware allowance is a credit, not a wage exemption, so it is worth exactly $4.23 per biweekly check at any income. Form DE-W4 has been required since 2020 and has no exempt status.
- Delaware Paid Leave contributions began January 1, 2025 and benefits began January 1, 2026: 0.8% of wages at employers with 25 or more employees, 0.32% at 10 to 24, and employers may pass up to half to employees.
- Wilmington is the only Delaware city with a wage tax: 1.25% of gross earned income for residents on all wages and for nonresidents on work done in the city.
- Delaware has no reciprocal agreements with any state, so Pennsylvania, Maryland and New Jersey residents who work in Delaware are withheld on their Delaware wages.
- Delaware has no employee-paid unemployment tax. Employers pay 0.3% to 5.4% (1.0% for new employers) on the first $14,500 of wages for 2026.
What Makes Delaware Payroll Different
Federal payroll tax is the same in every state. What changes from one state to the next is the second layer: state income tax withholding, employer unemployment taxes, any local wage taxes, and any state social-insurance premiums. Delaware's second layer has three distinct pieces. The state income tax is graduated but reaches its 6.6% top rate at only $60,000 of taxable income, so most full-time workers pay at the top rate on their last dollars. The newest piece is Delaware Paid Leave, a family and medical leave program whose payroll contributions started in 2025. And one city, Wilmington, adds its own earned income tax.
The state tax is withheld with the Division of Revenue percentage method, which works on annualized wages and then subtracts a flat $110 credit per allowance. That credit structure means the Delaware certificate moves withholding by the same dollar amount at every income level. The federal baseline behind all of this is explained in the how payroll taxes work guide.
Employee Withholding Overview in Delaware
A Delaware employee sees federal taxes and a graduated state income tax on every check, and usually the Paid Leave contribution. Only Wilmington residents and Wilmington workers see a city line.
| Deduction | Who Pays | Rate (2026) | Wage Cap |
|---|---|---|---|
| Social Security (federal) | Employee + Employer | 6.2% | $184,500 |
| Medicare (federal) | Employee + Employer | 1.45% | None |
| Additional Medicare (federal) | Employee only | 0.9% | Wages over $200K ($250K MFJ) |
| Federal income tax withholding | Employee only | Varies (W-4) | None |
| Delaware state income tax | Employee only | 0%–6.6% | None (after standard deduction and credits) |
| Delaware Paid Leave | Employer, up to half from employee | Up to 0.4% employee | FICA wage limit |
| Wilmington earned income tax | Employee (residents and city workers) | 1.25% | None |
| Employee unemployment | Nobody | None | – |
The federal lines work identically to any other state. For Social Security, the 2026 wage base is $184,500, after which Social Security stops for the year. Medicare has no cap. Delaware Paid Leave follows the same FICA wage limit, so it stops at the same point as Social Security. What is unique to Delaware is the credit-based allowance, the employer's choice over the Paid Leave split, and the Wilmington city line.
How Is Delaware State Income Tax Withheld?
The Division of Revenue's Employer's Guide sets out the formula. The employer annualizes the wage (multiplying by 52 weekly, 26 biweekly, 24 semi-monthly, or 12 monthly), subtracts the standard deduction for the employee's marital status, applies the tax computation table, subtracts the personal credit ($110 for each allowance), and divides by the number of pay periods. The Division also publishes ready-made wage-bracket tables for each payroll period and notes that the tables in use have not changed since 2014.
| Taxable income | Tax |
|---|---|
| $0 to $2,000 | $0 |
| $2,000 to $5,000 | 2.2% over $2,000 |
| $5,000 to $10,000 | $66.00 + 3.9% over $5,000 |
| $10,000 to $20,000 | $261.00 + 4.8% over $10,000 |
| $20,000 to $25,000 | $741.00 + 5.2% over $20,000 |
| $25,000 to $60,000 | $1,001.00 + 5.55% over $25,000 |
| Over $60,000 | $2,943.50 + 6.6% over $60,000 |
The standard deduction in the formula is $3,250 for single filers and for married filing separately and $6,500 for married filing jointly. The brackets themselves are the same for every filing status, set by 30 Del. C. section 1102 for every taxable year beginning after 2013. The Employer's Guide works a married-filing-jointly example with three allowances, and the Delaware paycheck calculator reproduces both of its worked examples and the biweekly wage-bracket table to the cent. Final Delaware tax is settled on the resident or nonresident return, where the return's own deductions and credits apply. The federal Form W-4 sets federal withholding, covered in the W-4 withholding explained guide, while Form DE-W4 sets Delaware withholding.
Form DE-W4 and the $110 Allowance Credit
When the federal Form W-4 dropped allowances in 2020, Delaware created its own certificate, Form DE-W4, because Delaware still gives personal credits. Employees hired since January 1, 2020, and anyone changing their Delaware withholding, complete it in addition to the federal W-4. The form asks for marital status (single or married), the number of allowances, and any additional amount to withhold each pay period. It has no exempt line.
The DE-W4R resident worksheet counts one allowance for yourself (two if you are 60 or older), one for your spouse (two if 60 or older), one for each dependent, one or two for the child and dependent care credit, and one or two each for you and your spouse being 65 or older or blind. Itemizers and people with non-wage income can adjust the count in section H, which converts every $2,000 of extra deductions into one allowance. Nonresidents use the DE-W4NR worksheet. An employer must send the Division of Revenue a copy of any certificate claiming 14 or more allowances.
| Payroll period | One allowance lowers withholding by |
|---|---|
| Weekly | $2.12 |
| Biweekly | $4.23 |
| Semi-monthly | $4.58 |
| Monthly | $9.17 |
| Annually | $110.00 |
Because each allowance is a fixed credit, adding or removing one changes a Delaware check by the same amount for a $30,000 earner and a $300,000 earner. An employee who owed Delaware tax at filing can raise withholding by lowering the allowance count or by entering a flat amount on line 5. The Delaware paycheck calculator models marital status, allowances, and line 5.
The City of Wilmington Earned Income Tax
Wilmington is the only Delaware city with a wage tax. Section 201 of the city's Earned Income Tax Regulations imposes a 1.25% tax on the salaries, wages, commissions and other compensation of city residents, regardless of where the work is performed, and of nonresidents for work done or services rendered in the city. Employers withhold it and file quarterly returns, with payments due April 15, July 15, October 15 and January 15.
Three details catch people out. First, it is charged on gross compensation: the regulations say deferred compensation, such as a 401(k) deferral, is taxed at the time of deferral, while Section 125, 129 and 132 benefits are excluded. Second, a nonresident based in the city owes the tax only on the share of days actually worked inside Wilmington, so hybrid and traveling workers can claim a refund of over-withheld tax on the city's refund form. Third, it is a city tax filed with the City of Wilmington, not part of the Delaware state return. A Wilmington resident earning $95,000 pays about $1,188 a year. The Delaware paycheck calculator adds this line when you select Wilmington.
Delaware Paid Leave Contributions
Delaware Paid Leave, created by the Healthy Delaware Families Act, pays partial wages to workers on parental, medical, or family caregiving leave, up to 80% of wages and no more than $900 a week. Payroll contributions began January 1, 2025, and the program began paying benefits on January 1, 2026. The Department of Labor's employer guide sets out the public plan's contribution rates by type of leave.
| Leave type | Total contribution | Most an employee can be charged |
|---|---|---|
| Parental leave | 0.32% | 0.16% |
| Medical leave | 0.40% | 0.20% |
| Family caregiving leave | 0.08% | 0.04% |
| Combined (25+ employees) | 0.80% | 0.40% |
Which lines an employer pays depends on size: employers with fewer than 10 eligible Delaware employees are exempt, employers with 10 to 24 provide parental leave only (0.32%), and employers with 25 or more provide all three (0.8%). The employer may require employees to pay up to 50% of the cost through payroll deduction, and if it charges less it must tell employees the lower rate. Covered wages are FICA wages earned in Delaware, capped at the FICA wage limit, so the most a full-coverage employee pays for 2026 is about $738. The Department's own example is a $50,000 worker on a 50/50 split, who pays $200 a year, about $7.70 per biweekly check.
Pennsylvania, Maryland and New Jersey Commuters
The Division of Revenue states that Delaware has no reciprocal agreements with any other state, and that nonresidents are subject to withholding on compensation for personal services performed in Delaware. So a Pennsylvania, Maryland, or New Jersey resident who works in Delaware has Delaware tax withheld. For the final tax, a nonresident computes Delaware tax as if a resident and then multiplies it by the share of income that comes from Delaware sources; the DE-W4NR worksheet does the same for withholding.
The commuter then claims a credit on the home-state return for tax paid to Delaware, so the same wages are not taxed in full twice. The direction matters for Wilmington too: a Pennsylvania resident in a Wilmington office pays the city tax on days worked there, while a Wilmington resident who works in Pennsylvania still owes the city tax as a resident. Delaware also lets an out-of-state employer withhold Delaware tax for a Delaware resident working elsewhere when both agree, after withholding for the work state.
Employer Payroll Obligations in Delaware
Delaware employers carry the federal employer taxes plus state unemployment insurance through the Department of Labor, and, if they have 10 or more Delaware employees, Delaware Paid Leave contributions. The federal side, covered in the employer payroll tax obligations guide, includes the matching 6.2% Social Security and 1.45% Medicare plus Federal Unemployment Tax (FUTA).
| Employer tax | Basis | Wage base (2026) |
|---|---|---|
| State Unemployment Insurance | 0.3%–5.4% (new employer 1.0%) | $14,500 per employee |
| Delaware Paid Leave | 0.8% (0.32% at 10 to 24 employees), at least half employer-paid | FICA wage limit |
| FUTA (federal, after state credit) | 0.6% | $7,000 per employee |
The Department of Labor's merit rate table shows the unemployment wage base rising from $12,500 for 2025 to $14,500 for 2026, and the new-employer rate falling from 1.2% to 1.0%, with rated employers between 0.3% and 5.4%. Paid Leave contributions and the quarterly hours and wage report are due 30 days after each calendar quarter ends. These are employer costs; only the Paid Leave share an employer elects to pass on can be deducted from employee pay. Model the combined cost-to-hire with the employer payroll tax calculator.
Delaware Supplemental Wage Withholding
Supplemental wages are compensation paid in addition to regular wages: bonuses, commissions, overtime, back pay, and similar payments. Delaware does not publish a flat supplemental rate. The Employer's Guide uses an annualized difference method instead.
- Paid with regular wages: the employer withholds as if the total were a single wage payment for the regular payroll period.
- Paid separately: the employer annualizes the regular wages and computes the tax, then adds the supplemental payment to the annualized wages and computes the tax again. The difference is withheld from the supplemental payment.
- Worked examples: on a $5,000 bonus to a worker paid $500 a week, the Guide withholds $269.63 for a single employee with one allowance and $258.00 for a married employee filing jointly with three allowances.
- Paid Leave and Wilmington still apply: both ride on supplemental wages the same as regular pay, within the Paid Leave wage cap.
Federal income tax withholding on supplemental wages is a separate calculation set by the IRS, and Social Security and Medicare still apply under their own rules. For the federal supplemental math, use the Bonus Tax Calculator.
Delaware Filing and Payment Frequency
Delaware sets each employer's withholding frequency from the tax withheld during a lookback period running from July 1 to June 30. An employer that withheld $6,020 or less files quarterly on Form W-1Q, by the last day of the month after the quarter ends. An employer that withheld $6,020.01 to $33,460 files monthly on Form W-1, by the 15th of the following month. An employer above $33,460 files eighth-monthly on Form W-1A, within three business days after each period ends (the 3rd, 7th, 11th, 15th, 19th, 22nd, 25th, and last day of the month). New employers file monthly until the next lookback period.
Employees must receive their W-2 by January 31, and the Division of Revenue's annual reconciliation, Form WTH-REC, is due January 31. New hires are reported within 20 days. Paid Leave and unemployment are reported to the Department of Labor, and the Wilmington tax is remitted to the City of Wilmington. The federal deposit schedule is covered separately in the payroll tax deadlines guide.
How Take-Home Pay Works in Delaware
The calculation sequence runs from gross pay down to net pay. Pre-tax deductions that reduce federal wages also reduce the wages subject to Delaware withholding, but FICA, Paid Leave and the Wilmington tax are based on wages before a 401(k) deferral.
- Start with gross wages for the pay period.
- Subtract federal pre-tax deductions (401(k), Section 125 health premiums) to find taxable wages for federal and Delaware income tax.
- Apply federal income tax withholding using the Form W-4 and IRS Publication 15-T.
- Annualize the Delaware taxable wage, subtract the $3,250 or $6,500 standard deduction, apply the schedule, subtract $110 per DE-W4 allowance, divide by pay periods, and add any line 5 extra amount.
- Subtract Social Security (6.2%) and Medicare (1.45%) on FICA wages, the Paid Leave share your employer passes on, and 1.25% for Wilmington if it applies. The remainder is net pay.
To see exact figures for a specific salary, allowance count, and pay frequency, use the Delaware paycheck calculator or the general take-home pay calculator for a full pre-tax benefits stack.
Delaware Payroll Quick Facts (2026)
| Income tax | Graduated 0%–6.6% (6.6% over $60,000) |
| Withholding method | Division of Revenue percentage method or wage-bracket tables |
| Standard deduction in formula | $3,250 single / MFS; $6,500 MFJ |
| State withholding form | Form DE-W4 (required since 2020) |
| Allowance value | $110 credit each |
| Exempt status | Not available |
| Delaware Paid Leave | 0.8% (25+ employees); employee pays up to half |
| Local wage tax | Wilmington only, 1.25% |
| Reciprocity | None with any state |
| Employee unemployment | None |
| UI wage base (employer) | $14,500 |
| Agencies | DE Division of Revenue, DE Dept. of Labor, City of Wilmington |
At LMN Tax Inc, the Delaware item that generates the most questions is the Wilmington line. Clients who move into the city see a new 1.25 percent deduction their coworkers in Newark or Dover do not have, and clients who work from home part of the week in Pennsylvania keep paying it on every day even though, as nonresidents, they owe it only on days worked in the city. The first group owes it on all wages; the second can usually recover the overpayment through the city's refund application, so we keep a simple calendar of in-office days. The second recurring issue is the Delaware allowance. Because it is a flat $110 credit, people expect claiming more to matter more for a high salary, and it does not: each one is worth $4.23 a biweekly check at every income. When someone owes Delaware tax at filing, we usually add a line 5 amount. The third is the Paid Leave line that started in 2025. Employers choose how much of the 0.8 percent to pass on, up to half, so two people on the same salary at different firms can see different deductions, and both can be correct.
Real-World Example: A Delaware Biweekly Paycheck
Avery earns $65,000 per year and works in Dover. Avery is paid biweekly (26 pay periods), files Single on the W-4 and on Form DE-W4, claims one Delaware allowance, works for a 40-person employer that passes half of the Paid Leave contribution to employees, and has no pre-tax contributions. The federal figure below follows the 2026 Publication 15-T method, matching the calculator; the Delaware figure follows the Division of Revenue formula.
Gross pay per period: $65,000 / 26 = $2,500.00
| Line | Amount |
|---|---|
| Gross wages | $2,500.00 |
| Federal income tax withholding | −$216.15 |
| Social Security (6.2%) | −$155.00 |
| Medicare (1.45%) | −$36.25 |
| Delaware income tax (1 allowance) | −$113.42 |
| Delaware Paid Leave (0.40%) | −$10.00 |
| Net pay (2026) | $1,969.18 |
The Delaware state line comes from the annual formula: $65,000 minus the $3,250 standard deduction is $61,750, which is over $60,000, so the tax is $2,943.50 + 6.6% × $1,750 = $3,059.00. One $110 credit leaves $2,949.00, or $113.42 per check, an effective Delaware rate of about 4.5% of gross. If Avery lived in Wilmington, a 1.25% city line of $31.25 would be added, and net pay would fall to $1,937.93. Run your own numbers with the Delaware paycheck calculator.
When Delaware Withholding Logic Does Not Apply
- Hybrid Wilmington workers: A nonresident based in a Wilmington office owes the city tax only on days worked in the city. Employers often withhold on the full wage, and the difference is recovered by a refund application to the city, not on the Delaware return.
- Cross-border and part-year workers: A nonresident with income from another state owes Delaware tax only on the Delaware-source share. A paycheck estimate that withholds on the full wage can overstate the final Delaware tax unless the DE-W4NR worksheet was used.
- Small employers and Paid Leave: Employers with fewer than 10 Delaware employees are exempt from Delaware Paid Leave, and employers with 10 to 24 owe only the parental portion. A worker at a small firm may see no Paid Leave line at all.
- Year-to-date wage bases: Social Security and Paid Leave both stop at the $184,500 FICA wage limit. A paycheck estimate that spreads them evenly across the year shows a smaller deduction on every check instead of a full deduction that stops mid-year.
- Self-employed and 1099 workers: Independent contractors are not subject to Delaware wage withholding or Paid Leave payroll deductions. They handle Delaware income tax through estimated payments, similar to the federal process in the self-employment tax guide, and Wilmington taxes their net profits separately.
Frequently Asked Questions
If you are a Delaware employee, use the Delaware paycheck calculator to see federal withholding, FICA, the graduated state tax, the Paid Leave share, and the Wilmington tax for your salary, allowances, and pay frequency, then confirm you actually filed a Form DE-W4 (a 2020-or-later federal W-4 does not set Delaware withholding). If you owed Delaware tax last spring, add a line 5 amount. If you work in Wilmington only part of the week, keep a record of in-office days for a city refund claim.
If you are a Delaware employer, confirm your Division of Revenue withholding frequency, your Department of Labor unemployment and Paid Leave accounts, how much of the Paid Leave contribution you pass to employees (and that you have told them), and whether any employees live or work in Wilmington; verify each employee's DE-W4 is on file; and model your full cost-to-hire with the employer payroll tax calculator and the employer payroll tax obligations guide for federal deposit and filing duties.
- Delaware Division of Revenue: Employer's Guide, Withholding Regulations and Employer's Duties (standard deductions, $110 personal credit, tax computation table, supplemental wage method and examples, nonresidents, no reciprocal agreements, filing frequency thresholds, W-1 / W-1Q / W-1A due dates, WTH-REC)
- Delaware Division of Revenue: Form DE-W4, Employee's Withholding Allowance Certificate, with DE-W4R and DE-W4NR worksheets (revision 2022-03-04)
- Delaware Code, Title 30, section 1102: rate schedule for taxable years beginning after December 31, 2013
- Delaware Department of Labor: Employer and TPA Guide to Delaware Paid Leave (contribution rates, employee share up to 50%, FICA wage limit, size tiers, quarterly due dates, cost example)
- Delaware Department of Labor: Delaware Paid Leave (contribution and benefit start dates, $900 weekly benefit cap, employer size tiers)
- Delaware Department of Labor: Employer Services, merit rate table (2026 wage base $14,500, new employer 1.0%, 0.3% to 5.4%)
- City of Wilmington: City Wage and Net Profits Taxes, and the Earned Income Tax Regulations (section 201 rate, section 203 nonresident apportionment, section 101 P deferred compensation, quarterly employer returns)
- IRS Publication 15 (Employer's Tax Guide)
- IRS Topic 751: Social Security and Medicare Withholding Rates