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Virginia is home to Northern Virginia’s massive tech and government contracting market. Its VOWA overtime law, graduated income tax (top rate 5.75%), and 2-employee workers’ comp threshold are the key compliance items. Rippling handles VA TAX, VEC, and VOWA compliance.
Virginia is one of the most economically significant states in the US, anchored by Northern Virginia’s massive technology and federal government contracting market (home to Amazon HQ2 and hundreds of defense and intelligence contractors) and Richmond’s growing financial services and tech sector. Virginia payroll is characterized by a graduated income tax (top rate 5.75%), the Virginia Overtime Wage Act (VOWA) which creates state-specific overtime obligations, and workers’ compensation required from the second employee. No state SDI or paid family leave. Virginia has no municipal income taxes.
Rippling’s Virginia payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| Virginia SUTA (VEC) | New employer 2.5% | On first $8,000 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 | Required for 2+ employees |
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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 |
| Virginia State Income Tax | 2% up to $3,000; 3% $3,001–$5,000; 5% $5,001–$17,000; 5.75% above $17,000 | Top rate 5.75% (unchanged since 1990) |
| Virginia Income | VA Rate |
|---|---|
| Up to $3,000 | 2% |
| $3,001–$5,000 | 3% |
| $5,001–$17,000 | 5% |
| Above $17,000 | 5.75% |
Virginia withholding remitted to VA TAX via VA-6 (annual reconciliation) and monthly/quarterly withholding payments. Standard deduction: $8,000 single / $16,000 married (2024).
Final Pay: Virginia requires final pay on the next regularly scheduled payday. Accrued vacation: if the employer’s policy provides for payout, Virginia treats it as wages under the Virginia Wage Payment Act — a clear written policy on forfeiture is important.
WARN Act: Federal WARN Act applies (100+ employees). No separate Virginia WARN law.
Virginia enacted the Virginia Overtime Wage Act (VOWA) effective July 1, 2021. VOWA creates a state-level overtime requirement that differs from federal FLSA in some ways: it uses a specific formula for the “regular rate” of pay and has a 3-year statute of limitations for overtime claims (vs. 2 years under FLSA). Employees have a private right of action under VOWA. Rippling applies the VOWA-compliant regular rate calculation for Virginia employees.
Northern Virginia (NoVA) — Fairfax County, Arlington, Alexandria, Loudoun County — is one of the most important tech and government contracting markets in the US, adjacent to Washington DC. Major employers include Amazon HQ2, Booz Allen Hamilton, Leidos, CACI, and the federal government. NoVA salaries compete with the DC metro area — employers should benchmark to that market, not to statewide Virginia averages.
Virginia requires workers’ comp coverage for employers with 2 or more employees (regular, seasonal, part-time, or temporary). This is lower than most states. Virginia workers’ comp is administered by the Virginia Workers’ Compensation Commission (VWCC). Coverage can be obtained through private insurers or the VWCC assigned risk pool.
Virginia’s minimum wage is $13.50/hour from January 2025 (was $12.00/hour from January 2023). Further increases are planned. Tipped employees: $2.13/hour minimum direct wage (tip credit). All Rippling payroll employees are paid at or above the applicable minimum wage.
