How to Do Payroll in Mississippi: A Step-by-Step Guide

Last reviewed: July 2026

Mississippi keeps a lighter regulatory footprint than most states: there's no state minimum wage, and most employers have no state-mandated pay frequency to follow. That said, the state still collects income tax withholding, requires its own exemption certificate, and expects new hires reported faster than the federal default. Here's the full sequence.

1. Get Your Federal EIN

Every payroll setup starts with a federal Employer Identification Number. Apply free at IRS.gov and you'll have it within about fifteen minutes. You'll need it for every state registration that follows, plus your business bank account and payroll software.

2. Register with Mississippi Revenue

Register for a withholding account with the Mississippi Department of Revenue. This lets you withhold Mississippi income tax from employee paychecks and remit it on the schedule the Department assigns based on your expected withholding volume.

Mississippi has no state minimum wage law; Mississippi Code Section 25-3-40 defers to whatever the federal minimum wage happens to be, currently $7.25 an hour. Cities and counties are barred from setting a higher local rate.

3. Register for SUI with MDES

Register with the Mississippi Department of Employment Security (MDES). New employers pay a rate of 1.0% in 2026 on a taxable wage base of $14,000 per employee. This tax is fully employer-paid; nothing comes out of an employee's check for it.

After a couple of years of history, your rate becomes experience-rated, adjusting based on how many former employees have drawn benefits against your account. Experienced-employer rates currently range from 0.20% to 5.40%.

4. Collect Employee Paperwork

Before anyone's first shift, collect three documents:

• Form I-9, verifying work eligibility, with Section 2 completed within three business days of the start date.
• Federal Form W-4, for federal withholding.
• Form 89-350, the Mississippi Employee's Withholding Exemption Certificate. Without it, withhold state tax with zero exemptions.

Report the new hire to the Mississippi State Directory of New Hires within 15 days of the start date, a shorter window than most states use. Most payroll software submits this automatically once the hire is entered into the system.

5. Set a Pay Schedule

Most Mississippi employers have no state law dictating pay frequency and can set whatever regular schedule fits their business, weekly, biweekly, semimonthly, or monthly. The one exception: manufacturers with 50 or more employees must pay wages in full at least twice a month, on paydays such as every two weeks or the 2nd and 4th Saturday of the month.

Whatever schedule you land on, put it in writing, post it, and follow it consistently. Federal recordkeeping requirements apply regardless of which schedule you choose.

6. Run Payroll and Make Deposits

Each pay period, calculate gross wages, apply federal withholding from the W-4, apply Mississippi withholding from Form 89-350, and withhold the employee's share of Social Security and Medicare. You owe a matching FICA amount as the employer, along with federal and state unemployment tax.

Federal deposits follow the IRS's semiweekly or monthly schedule and get reported quarterly on Form 941. State withholding deposits follow the schedule Revenue assigned at registration. Our paycheck calculator shows federal and Mississippi withholding together, and the W-4 helper walks new hires through both forms before their first check.

7. Close Out the Year

W-2s are due to employees and the Social Security Administration by January 31. Mississippi also expects an annual withholding reconciliation so the totals on your W-2s match what you deposited across the year. Filing this in January instead of waiting keeps you clear of the per-form penalties that accumulate for late or missing W-2s.

Frequently Asked Questions

How do I set up payroll for the first time in Mississippi?

Get a federal EIN from the IRS, register with the Mississippi Department of Revenue for withholding, register with the Mississippi Department of Employment Security for a SUI account, collect I-9, W-4, and Form 89-350 paperwork from each employee, then pick a pay schedule and run your first payroll.

What state tax form replaces the W-4 in Mississippi?

Mississippi employees fill out Form 89-350, the Employee's Withholding Exemption Certificate, alongside the federal W-4. Without one on file, you must withhold state tax with zero exemptions applied.

What is the minimum wage in Mississippi?

Mississippi has no state minimum wage law of its own, so the federal minimum wage of $7.25 an hour applies. Cities and counties are barred by state law from setting a higher local rate.

When do new hires need to be reported in Mississippi?

Mississippi employers must report every new hire and rehired employee to the Mississippi State Directory of New Hires within 15 days of the start date, a shorter window than the 20-day federal default.