Getting your payroll set up correctly is a crucial part of running a successful child care business in Oklahoma. This guide will walk you through all the key steps and components you’ll need to consider, from setting up your payroll tax account to understanding your tax rates. By following these steps, you can ensure that your payroll processes run smoothly and are compliant with state regulations.

To get set up with payroll in Oklahoma, you must provide the following:

• Oklahoma Withholding Tax Account ID

• Oklahoma Unemployment Insurance Tax Number

• Oklahoma Employer Unemployment Tax Rate

• Oklahoma Power of Attorney

Who needs to pay payroll taxes in Oklahoma?

Any business in Oklahoma with employees, including child care providers, must pay payroll taxes. This includes withholding state income tax from employee wages and paying unemployment insurance taxes.

What is a Withholding Tax?

Withholding tax is the amount an employer withholds from employees' wages and pays directly to the state. The amount withheld is credited against the income taxes the employee must pay during the year.

What is the Unemployment Insurance (UI) Tax?

The UI tax is a tax that Oklahoma employers must pay to the Oklahoma UI Trust Fund. This fund provides temporary income (benefits) to eligible claimants who become totally or partially unemployed through no fault of their own.

Due to the 2020 pandemic, historic levels of benefits were paid from the UI Trust Fund to unemployed individuals. This depletion led to an experience factor of 50% and conditional factor D in 2021 and 2022. These factors remain unchanged for 2024. Most employer rates will not increase for 2024.

Oklahoma Withholding Tax Account ID

Your Oklahoma withholding tax account ID is a thirteen-character account ID formatted as:

• WTH-XXXXXXXX-XX

This number is used to report and remit state income taxes withheld from employee wages to the Oklahoma Tax Commission.

How to find your Oklahoma Withholding Tax Account ID

You can find your Oklahoma withholding tax account ID on any correspondence from the Oklahoma Tax Commission. You can also contact them via phone at 405-521-3160.

Don’t have an Oklahoma Withholding Tax Account ID?

You can acquire an Oklahoma withholding tax account ID by registering online with the Oklahoma Tax Commission.

Oklahoma Unemployment Insurance (UI) Tax Account Number

Your Oklahoma UI tax account number is a nine-digit number formatted as:

• XX-XXXXXXX

This number is required for reporting and paying unemployment insurance taxes to the Oklahoma Employment Security Commission (OESC).

How to find your Oklahoma UI Tax Account Number

You can locate your Oklahoma UI tax account number on any previous quarterly contribution report (OES-3) or any other correspondence from the OESC. You can also contact them through the following methods:

• Phone at 405-557-7222

• Email at EzTaxExpress@oesc.state.ok.us

Don’t have an Oklahoma UI Tax Account Number?

New businesses can register online with the OESC to retrieve your account number and tax rate.

Oklahoma Employer Unemployment Tax Rate

Your Oklahoma employer unemployment tax rate is a percentage at which you pay unemployment taxes and will range from 0.3% to 9.2% for 2024. This rate is used to calculate the amount of unemployment tax you owe per employee. New employers receive a rate of 1.5%, while experienced employers receive an unemployment tax rate based on their benefit-wage ratio.

How to find your Oklahoma Employer Unemployment Tax Rate

You can find your current unemployment tax rate on your annual notice of assessment from the Oklahoma Employment Security Commission (OESC) or by contacting them directly via:

• phone at 405-557-7222

• email at EzTaxExpress@oesc.state.ok.us

Don’t have an Oklahoma Employer Unemployment Tax Rate?

New businesses can register online with the OESC to retrieve your account number and tax rate.

Oklahoma Power of Attorney (POA) (BT-129)

For child care businesses delegating their payroll processing to a payroll software like Playground Payroll, they need to fill out a Power of Attorney (POA) form (BT-129) which is written authorization for an individual or other entity to act on your business’s behalf in terms of tax and reporting matters to the Oklahoma Tax Commission.

Playground Payroll users can fill out BT-129 during setup after filling out tax information. You can also complete BT-129 online using OKTAP Power of Attorney Portal. Email payroll@tryplayground.com for more information.

Further Reading

https://oklahoma.gov/tax/businesses/new-business-center.html

https://oklahoma.gov/tax/businesses/withholding.html

https://oktap.tax.ok.gov/oktap/web/webfiles/Complete_a_Withholding_Application.pdf

https://oklahoma.gov/content/dam/ok/en/tax/documents/forms/businesses/general/BT-129.pdf

https://esign.com/power-of-attorney/ok/tax/

https://oklahoma.gov/oesc/employers/tax.html