Working Vermonters to Pay First-Ever State Payroll Tax

Both the House and Senate advanced the major childcare legislation that was vetoed by the Governor without contest, enacting a payroll tax that will cost Vermonters nearly $100 million annually once it becomes effective on July 1, 2024. In recent weeks, the Vermont Chamber has heard an outpouring of input from businesses on anticipated solutions for absorbing this new cost. Many will pass the cost to consumers, further contributing to the soaring cost of living in Vermont which already hinders the ability of employers to recruit and retain workers. While a 0.44% tax may appear minor in print, its contributions to the cumulative impact of cost pressures and the cyclical nature of the Vermont economy will have repercussions.  

The Vermont Chamber agrees that accessible childcare is part of addressing workforce challenges, but concerns remain that this funding isn’t structured to address accessibility and affordability for working Vermonters and if this $100 million doesn’t make gains on those key issues, advocates will be searching for even more funding. To understand the impact this tax will have on your business, enter your payroll to calculate the payroll tax levied on your business and employees, here.