Itemized deduction statement
With every wage payment, itemize state and federal income-tax, Social Security, and other deductions with the amount of each—or state that no deductions were made.
See details →MONTANA PAYROLL RESOURCES · MT · REVIEWED 2026-10-03
Montana Payroll &
Pay Statement Guide
Review Montana’s itemized deduction-statement rule, the 2026 withholding overhaul and new Form MW-4, 2026 unemployment figures, workers’ compensation, and official employer resources. Run payroll for a small team and get employee statements from every calculated run.
Statement with every paymentMontana requires an itemized statement of deductions—or a statement that no deductions were made—with every wage payment.
New 2026 withholding methodMontana’s 2026 withholding uses federal-style standard deductions instead of Montana allowances.
Reviewed 2026-10-03Checked against current Montana government sources.
AT A GLANCE
What distinguishes Montana pay-period records
Montana’s statement rule applies to all employers in the state. Under Mont. Code Ann. § 39-3-101, an employer making a payment of salary or wages must give the employee an itemized statement setting out the amounts deducted for state and federal income taxes, Social Security, and any other deductions, together with the amount of each. If no deduction is made, the employer must give the employee a statement that the payment does not include any deductions. The statute does not list gross pay, hours, rates, or pay-period dates as required fields.
State income tax withholding
Montana’s 2026 withholding no longer uses Montana allowances. The calculation relies on the federal standard deduction for the employee’s filing status, and employers should distribute the revised 2026 Form MW-4.
View 2026 withholding updates →Unemployment insurance
For 2026, Montana’s taxable wage base is $47,300, the rate schedule is Schedule 1, and every employer also pays a 0.18% Administrative Fund Tax. New employers receive an industry-based rate.
View 2026 rate explanation →Workers’ compensation
Montana generally requires employers with employees to maintain workers’ compensation coverage, subject to statutory exemptions such as qualifying independent contractors with an exemption certificate.
View insurance compliance →STATE PAYROLL OVERVIEW
What makes Montana different from other pay-statement jurisdictions
Montana’s statement rule is universal in coverage but narrow in content. Every Montana employer must provide the statement with each payment, and the required content is an itemization of deductions with their amounts—or an affirmative statement that there were none. That “no deductions” statement is unusual and should not be skipped simply because a payment had nothing withheld.
Montana overhauled its withholding for 2026. The top marginal individual rate fell from 5.9% to 5.65%, and the 4.7% rate now applies to higher thresholds. More importantly for payroll setup, employees no longer claim Montana allowances; the withholding calculation now relies on the federal standard-deduction amount for the employee’s filing status. The Department of Revenue recommends that employers distribute the revised Form MW-4.
Montana has no tip credit, training wage, or meal credit; the 2026 minimum wage is $10.85 per hour. Montana unemployment insurance uses a high wage base—$47,300 for 2026, set at 80% of the state’s 2024 average annual wage—and adds the 0.18% Administrative Fund Tax on the same base.
PAYROLL REQUIREMENTS CHECKLIST
The Montana requirements checklist
When a statement is required
Give the statement upon making each payment of salary or wages under § 39-3-101.
Information to include
Itemize amounts deducted for state and federal income taxes, Social Security, and any other deductions, with the amount of each. If no deduction is made, state that the payment does not include any deductions.
Income tax withholding
Use the 2026 Montana withholding method and the revised Form MW-4; Montana allowances are no longer used.
Other employer obligations
Apply unemployment contributions and the Administrative Fund Tax, workers’ compensation coverage, the 2026 minimum wage with no tip credit, and three-year payroll-record retention separately from the statement rule.
PAYROLL RECORDS IN PRACTICE
How Montana treats the statement after payday
Delivery method
Section 39-3-101 does not specify paper or electronic delivery and states no consent or printing condition. Use a delivery method the employee can access and keep.
Supporting records
Montana employers must keep basic employment and earnings records for three years. Keep the records that support each deduction itemized on the statement.
USE THE 2026 MONTANA METHOD — ALLOWANCES NO LONGER APPLY
Use Montana’s 2026 withholding method and Form MW-4
Montana’s 2026 tables mirror the federal approach by using the federal standard deduction for the employee’s filing status. Payroll systems that still rely on Montana allowance counts should be updated. Employees can use the revised MW-4 to adjust their withholding.
LOCAL CONSIDERATIONS
Montana payroll is driven mainly by state rules
The primary sources reviewed for this page did not identify a municipal wage-withholding tax or local minimum-wage ordinance that changes payroll calculations in Billings, Missoula, Bozeman, or Great Falls.
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Billings, Missoula, and BozemanApply the statewide statement rule, minimum wage, withholding, unemployment, and workers’ compensation requirements.
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No tip credit statewideMontana does not allow a tip credit, training wage, or meal credit. Tipped employees receive at least the full $10.85 minimum wage for 2026.
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North Dakota residentsEmployers near the North Dakota border should review the reciprocity arrangement before deciding which state’s tax to withhold.
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Independent contractorsMontana uses Independent Contractor Exemption Certificates for workers’ compensation purposes. Confirm a valid certificate before treating a worker as exempt from coverage.
A SOURCE-BACKED WORKFLOW
A source-backed workflow for Montana payroll records
1Collect the 2026 MW-4Use the revised form and the 2026 calculation method.›
2Enter payroll detailsAdd wages, hours or salary, deductions, and pay dates.›
3Review withholding and UIApply 2026 withholding, the $47,300 wage base, the employer’s UI rate, and the 0.18% Administrative Fund Tax.›
4Generate the statementItemize every deduction with its amount, or state that no deductions were made.›
5Retain supporting recordsKeep employment and earnings records for three years.›
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OFFICIAL MONTANA SOURCES USED FOR THIS PAGE
Official Montana sources used for this page
01
Montana Code Annotated · § 39-3-101
Primary authority for the itemized deduction statement and the no-deduction statement.
02
Montana Department of Revenue · 2026 Withholding Updates
2026 rate changes and new withholding method.
03
Montana Department of Revenue · Form MW-4
Current employee withholding certificate.
04
Montana Unemployment Insurance Division · 2026 Rate Explanation
2026 wage base, Schedule 1, new-employer rates, and Administrative Fund Tax.
05
Montana Department of Labor & Industry · 2026 Minimum Wage Poster
2026 minimum wage and the prohibition on tip credit, training wage, and meal credit.
06
Montana Employment Relations Division · Insurance Compliance
Workers’ compensation coverage compliance.
RESEARCH & REVIEW
Built from primary sources. Reviewed for accuracy.
This page is built from primary Montana sources and is periodically reviewed against current agency guidance. We use the Montana Code Annotated, Department of Revenue withholding materials, and Department of Labor & Industry unemployment, wage, and workers’ compensation resources whenever available.
FREQUENTLY ASKED QUESTIONS
Montana pay-statement FAQ
What must a Montana pay statement show?
Under Mont. Code Ann. § 39-3-101, the employer must itemize amounts deducted for state and federal income taxes, Social Security, and any other deductions, with the amount of each.
What if no deductions were made from a Montana paycheck?
The employer must still give the employee a statement that the payment does not include any deductions.
What changed in Montana withholding for 2026?
The top rate fell from 5.9% to 5.65%, and the withholding calculation now uses the federal standard deduction for the employee’s filing status instead of Montana allowances. Employers should distribute the revised Form MW-4.
What are Montana’s 2026 unemployment figures?
The 2026 taxable wage base is $47,300 under Schedule 1, and every employer also pays the 0.18% Administrative Fund Tax. New employers receive an industry-based rate.
Does Montana allow a tip credit?
No. Montana does not allow a tip credit, training wage, or meal credit. The 2026 minimum wage is $10.85 per hour.
Does Montana have local payroll taxes?
The primary sources reviewed did not identify a municipal wage-withholding tax or local minimum wage in Montana’s major cities.
ACCURATE RECORDS. SUPPORTING EVIDENCE.
Use accurate records, review the preview, and keep the supporting evidence.
Prepare a Montana Pay Run, review the 2026 withholding method and itemized deductions before completion, and keep the applicable Montana sources with your payroll workflow.