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Delaware has a 6.6% top income tax, Wilmington city wage tax (1.25%), and a minimum wage increasing to $15/hour in 2025. DE Paid Leave contributions begin January 2025. Rippling handles DE Division of Revenue, DDOL, and Wilmington filings.
Delaware is a small Mid-Atlantic state with an outsized role in US corporate law (preferred incorporation state for 65%+ of Fortune 500). Delaware’s physical economy centers on Wilmington (financial services, credit card industry — most major US credit card issuers are headquartered here) and Dover. Payroll is characterized by a progressive income tax (top 6.6%), Wilmington city wage tax (1.25%), and a minimum wage increasing to $15.00 in January 2025. A new paid leave program begins collecting contributions in 2025.
Rippling’s Delaware payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| DE SUI (DDOL) | New employer 1.8% | On first $10,500 of wages (2024) |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% | No wage base limit |
| Workers’ Compensation | Varies by risk class | Mandatory |
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| Contribution | Rate | Notes |
|---|---|---|
| Federal Income Tax | Graduated 10–37% | Per W-4 |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% + 0.9% surtax | Surtax above $200K single |
| Delaware State Income Tax | 0%–6.6% | 7-bracket; top rate 6.6% on income above $60,000 |
| Wilmington City Wage Tax | 1.25% | On wages earned in or by Wilmington residents |
| Delaware Income | DE Rate |
|---|---|
| Up to $2,000 | 0% |
| $2,001–$5,000 | 2.2% |
| $5,001–$10,000 | 3.9% |
| $10,001–$20,000 | 4.8% |
| $20,001–$25,000 | 5.2% |
| $25,001–$60,000 | 5.55% |
| Above $60,000 | 6.6% |
DE withholding remitted to DE Division of Revenue. Annual W-3 reconciliation. Plus Wilmington 1.25% city wage tax for applicable employees.
Final Pay: Delaware requires final pay on the next regular payday. Accrued vacation: DE Wage Payment and Collection Act treats promised vacation as wages.
Delaware is famous as the preferred state of incorporation for most US corporations due to the Delaware Court of Chancery’s expertise in corporate law. However, incorporating in Delaware does not create Delaware payroll obligations. Payroll obligations arise where employees physically work, not where the company is incorporated.
Wilmington levies a 1.25% city wage tax on wages earned by Wilmington residents (wherever they work) and on wages earned within Wilmington by non-residents. Employers withhold and remit quarterly to the City of Wilmington.
Delaware’s minimum wage is $13.25/hour (January 2024), increasing to $15.00/hour on January 1, 2025.
Delaware enacted a Paid Family and Medical Leave law: employers with 10+ employees must provide paid leave beginning January 1, 2026. Contributions (employer + employee) begin January 1, 2025. Benefits: up to 12 weeks family leave + 6 weeks medical leave, paid at 80% of wages up to the cap.
