U.S. Virgin Islands payroll setup for your first hire

Withholding and unemployment are two doors.

Paycheck withholding sits with the Bureau of Internal Revenue. Unemployment insurance, called UI, sits with the Virgin Islands Department of Labor. The unemployment tax is often called SUTA, state unemployment tax. This is not Puerto Rico’s withholding account on SURI, the Unified Internal Revenue System, plus an employer number on the Employer Services Portal. This is not the District of Columbia’s Form FR-500 at MyTax.DC.gov plus the Employer Self-Service Portal. This is not Rhode Island’s one Business Application and Registration. This is not California’s one employer payroll-tax registration.

The tax structure booklet says the Bureau administers the internal revenue laws of the Virgin Islands. Income tax withheld from wages for work in the Virgin Islands is remitted to the Bureau. That is true for a Virgin Islands employer, a U.S. employer, or an employer based somewhere else. The booklet says there is no procedure for a deposit to a bank or to the IRS that is later transferred to the Bureau. IRS Forms 941 and 809 cannot be used for this withholding. Social Security and Medicare taxes, called FICA, and federal unemployment tax, called FUTA, follow U.S. procedures and are remitted to the IRS Center in Philadelphia, not to the Bureau. The booklet names IRS Circular SS, Publication 80, for those two federal taxes.

Register paycheck withholding with the Bureau of Internal Revenue.

The Virgin Islands takes income tax from a paycheck. This is not Texas’s rule of no state paycheck withholding. The booklet says the dates, the amounts, and the notice to employees follow the same rules as the United States. It tells you to use Circular E, Publication 15, the IRS employer’s tax guide, for the applicable amounts and dates.

The deposit form is Form 501-VI. The booklet writes it as Form 501VI, Withholding Tax Deposit. The live coupon is Form 501 V.I., revised January 2017, and the face also prints Form 501VI (1/2017). It is the Employer’s Withholding Tax Deposit Coupon. It is only for income tax withheld on wages. The coupon says there is no procedure for a deposit to a bank or the IRS. Every payment goes directly to the Bureau. A mailed deposit counts as on time if the U.S. postmark is on or before the due date. The Bureau uses the date it receives the deposit to judge the timing. A deposit on this coupon does not close the quarterly return.

The coupon prints three deposit clocks, and it points you back to Publication 15. If you accumulate less than $2,500 of tax liability during the quarter, you may pay with Form 941 V.I. instead of depositing. A monthly deposit is due on the 15th day of the month after the month the tax was withheld. A semiweekly deposit is generally due on Wednesday or Friday, based on the payday. Paydays on Wednesday, Thursday, or Friday are due on or before the following Wednesday. Paydays on Saturday, Sunday, Monday, or Tuesday are due on or before the following Friday. The coupon says the employer always has three banking days to make that deposit. If undeposited employment taxes reach $100,000 or more, deposit them by the close of the next banking day. The coupon does not print the lookback dollar that decides monthly versus semiweekly. The booklet sends you to Circular E for that dollar. Do not copy a lookback dollar from an older tax calendar onto this coupon.

The quarterly return is Form 941-VI. The booklet writes it as Form 941VI, Employer’s Quarterly Withholding Tax Return. The live return is Form 941 V.I., revised May 2012, and the face also prints Form 941VI (05/2012). It is the Employer’s Quarterly Virgin Islands Tax Return. Read the booklet and the form as two documents. The booklet says you file Form 941VI by the last day of the following quarter, pay the amount due minus credit for deposits, and file it with the Bureau. The form face prints different dates. The first quarter ends March 31 and is due April 30. The second quarter ends June 30 and is due July 31. The third quarter ends September 30 and is due October 31. The fourth quarter ends December 31 and is due January 31. Schedule B (Form 941VI), revised May 2012, prints the same four due dates. The last day of the following quarter is not April 30. Use the due date printed on the return you file, and ask the Bureau if the booklet’s sentence still controls.

The Form 941 V.I. instructions say you should have a balance due only if net tax for the quarter is less than $2,500. If line 7 is $2,500 or more and you deposited the tax when it was due, the balance due should be zero. If line 7 is under $2,500, do not complete the monthly summary. Complete that summary if you are a monthly depositor, and see Circular E for the deposit rules. A semiweekly depositor checks the semiweekly box and attaches Schedule B. Schedule B is a list of tax liability by payday. It is not a list of deposits. All deposits on that schedule are made directly with the Bureau. The same instructions say an overpayment can be refunded or applied to the next return. If you do not check a box, the Bureau applies it to the next return, and it may apply an overpayment to a past-due tax account.

The year-end wage statement is Form W-2VI, the wage and tax statement for work in the Virgin Islands. The booklet says that by January 31 each employer gives that statement to each employee who earned wages for services in the Virgin Islands during the preceding year. Form W-3SS transmits Copy A of Form W-2VI to the Social Security Administration. Copy 1 of Form W-3SS transmits Copy 1 of Form W-2VI to the Bureau. The live forms catalog lists Form 501 V.I. and Form 941 V.I. It does not list Form W-2VI. Use the booklet for that year-end form, and ask the Bureau for the current copy. The catalog’s withholding certificate is the federal Form W-4. A federal Form W-4 does not replace Form 941-VI, and Form 941-VI does not replace Form W-2VI.

Open the unemployment account with the Virgin Islands Department of Labor.

The unemployment taxes overview says that when an employer begins business in the Virgin Islands, the employer must notify the agency promptly so the tax status can be determined. The door on the forms page is the Employer Registration. That one-page form asks for the owner or the corporation, the trade name, the Virgin Islands location, the first date wages were paid, the type of ownership, and the federal employer identification number, called a FEIN. The form’s mail box is P.O. Box 303159, St. Thomas, Virgin Islands 00803. The form prints (340) 776-3700 for St. Thomas and (340) 773-1440 for St. Croix. The employer portal prints a different St. Croix number, (340) 773-1994, and the same St. Thomas number, (340) 776-3700. Use the number on the page you are calling.

The portal says a new user needs the federal employer identification number, a PIN letter from the Department, business contact information, and a valid email address. That login is how you file quarterly wage reports and manage the tax account. The PIN letter is not the federal number. The federal number is not the Virgin Islands employer number the agency writes on the registration form.

The overview’s coverage rule is service for an employing unit, unless the law specifically excludes that service. In general, service is covered if it is performed for some portion of a day in the current or preceding calendar year. Full-time and part-time work count. Work by adults and by minors counts. If you own two businesses, the overview treats them as one employing unit. Household and domestic work in a private home, or in a local college club, fraternity, or sorority, is covered when aggregate pay in that location equals or exceeds $500 in a calendar quarter in the current or preceding calendar year. The overview does not print a $1,500-quarter test or a 20-week test as the general rule. This is not California’s $100-in-a-quarter test. There is no 15-day California registration clock on these pages.

For unemployment insurance and the employment service, the overview says the Virgin Islands is treated as a state. Your federal unemployment tax is used primarily to pay for running those programs. The same page prints a teaching table: a 6.0 percent federal base, a 0.2 percent fund-building surtax, a 6.2 percent total, a 5.4 percent offset credit, and a 0.8 percent net federal tax. That table is not dated 2026. The booklet still sends FUTA to the IRS, not to the Bureau. Use the IRS credit for the year you are filing. Do not treat the overview’s 0.8 percent line as this year’s credit-reduction notice.

The 2026 wage base is $32,100. The rate release does not print a new-employer percent.

Read the overview and the December 29, 2025 rate release as two documents. Do not pretend the Department printed a new-employer percent it did not print.

The overview says the taxable base each calendar year is 60.0 percent of the average annual wage in insured work, rounded to the nearest $100. Almost every kind of pay counts, including salaries, wages, commissions, tips, bonuses, and the cash value of meals or lodging. The Department assigns a rate for each taxable year and mails the notice by January 31. The quarterly report is due even if you paid no wages. The due dates are April 30, July 31, October 31, and January 31. The agency says it has no authority to grant an extension. A penalty on a late wage and contribution report does not exceed $60 a year. Interest on delinquent contributions and reports is 9.0 percent a year. The quarterly form is preprinted with your name, address, account number, the quarter, the due date, the tax rate, and the taxable wage base. If the form does not arrive, you still file. Ask the agency to mail one, and use the preprinted form when you have it.

The rate release, effective January 1, 2026, says the rates follow Title 24, Chapter 12, Section 308 of the Virgin Islands Code. The 2026 taxable wage base is $32,100, equal to 60 percent of the average annual wage in insured employment. Individual employer rates, based on experience and interval groups, run from 2.43 percent to 5.4 percent. The average contribution rate is 4.04 percent. The release says that average was 4.06 percent in 2025 and 4.11 percent in 2024. It does not print a separate percent for a new employer. Enter the rate on the notice the Department mails you, or the rate preprinted on the quarterly form. This is not Puerto Rico’s $7,000 unemployment cap. This is not the District of Columbia’s 2.7 percent new-employer rate on $9,000. This is not Rhode Island’s 1.21 percent cash rate on $30,800.

New hire is 20 days on the form, and the code also prints an electronic spacing.

The new-hire report is a list of who you just hired or rehired. It is not a line on the Employer Registration. It is not a line on Form 941-VI. It is not the quarterly unemployment wage report.

The new-hire form says Title 16, Chapter 13, Subchapter I, Section 378(g) of the Virgin Islands Code, and 42 U.S.C. 653A, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, require every employer to report each newly hired or rehired employee within 20 days of the date of hire. The form says the start-to-work date is the first day the person performs services for pay. Mail it to the Department’s New Hire Reporting Program, P.O. Box 303159, St. Thomas, VI 00803. The phone on the form is (340) 776-3700, extension 2009. The fax is (340) 715-5746. The form asks for the employer’s name, the federal employer identification number, the address, a contact, and a VIESA number. The form does not spell out VIESA. The employee block asks for the name, the Social Security number, the address, the date of birth, the job title, the start-to-work date, the hire or rehire date, and whether you provide medical insurance.

16 V.I.C. § 378 says an employer who hires or rehires an employee sends the Department of Labor, not later than 20 days after that date, the employee’s name, address, and Social Security number, and the employer’s name, address, and federal tax identification number. The same sentence allows a report on a semimonthly basis, not less than 12 days and not more than 16 days apart, if you report electronically or magnetically. The report can be a W-4, or an equivalent form with those required facts, by first-class mail, magnetically, or electronically. The Commissioner, with the Attorney General, may require more data. The Department’s form asks for more than the code’s short list, including the job title, the date of birth, and medical insurance. The form prints the 20-day line. It does not print the 12-to-16-day electronic spacing. Keep both. A paper report on the form is the 20-day path. An electronic file can use the spacing the code prints. The same section’s public text sets a civil penalty that does not exceed $5,000 for each new hire or rehired employee who is not reported. This is not Puerto Rico’s 19-day sentence beside a 20-day federal paragraph. This is not Rhode Island’s 14-day report. This is not Maine’s 7-day report.

Workplace injury insurance is the Workers’ Compensation Trust Fund.

The fund calls this workers’ compensation. It is a policy from the Workers’ Compensation Trust Fund at the Department of Labor. It is not the District of Columbia’s market of licensed private insurers. It is not Texas optional coverage. It is not Puerto Rico’s State Insurance Fund in name, but it is a fund you buy from the territory. A payroll login is not a policy. The unemployment portal does not sell this policy.

The handbook, in the Commissioner’s memorandum, says Act 8859 was signed on August 9, 2024. The act moved the Government Insurance Fund from the Department of Finance to the Department of Labor and renamed it the Workers’ Compensation Trust Fund. The classification codes and basic rates in that sixth edition took effect January 1, 2024. The handbook does not print a 2026 class rate. Use the rate the fund assigns to your business.

The handbook’s coverage extract says the fund covers all persons who work for wages, including minors hired by appointment or by a spoken or written contract. It then lists exceptions. One exception is a person employed as a domestic servant in a private home. Another is short maintenance, repair, or remodeling in the employer’s private home, not exceeding ten consecutive work days, or at the work premises if the employer has no other employees covered by the law there. A person who works only for aid or sustenance from a religious or charitable organization is excepted. A person whose injury rule comes from United States law is excepted. An exempt worker can be covered by agreement. A first hire who is not in that exception list is in the wage-earner rule. Do not paste another territory’s headcount onto this handbook.

The premium is computed on the first $8,424 of each worker’s wages for the year. That $8,424 cap is not the $32,100 unemployment wage base. A rate in the handbook is the premium for each $100 of payroll. No premium is less than $50 per classification. The fund assigns the classification from the hazards of the business. A new employer files the estimated report. The handbook says the actual report is not required for a new business. An employer who was insured on December 31 of the prior year files the actual report for the nine months ending September 30, and the estimate for the coming year.

Read the payment sentences as more than one document. The handbook says premium payment must accompany the reports, and that an employer may pay in two installments when the estimated premium is $2,500 or more. It also says the annual premium is due in full by December 31, or in two parts: at least half by December 31, for a six-month policy, and the second part by June 30. It says the employee count is due by September 30, rate notices by November 15, and renewals begin January 1. The Commissioner’s 2024 memorandum says pay the annual premium by December 31, 2024, with a semi-annual option, and that starting October 21, 2024 payments are made at the Department’s offices. The February 2025 updates sheet says the new dates are a September 30 filing for the actual and the estimate, and a December 31 payment. The renewal letter says file both reports by September 30 of the current year, do not send payment with the reports, and pay the premium the fund bills no later than December 31 of the current year. Those last two documents do not lock the December 31 date to 2024. The handbook and the renewal letter disagree on whether the check rides with the report. Follow the renewal letter and the updates sheet for the file you are sending now, and pay the invoice the fund sends. The handbook says coverage is in force after the statement is filed and the premium for the declared wages is paid. An injury before that payment is an uninsured-employer case unless you pay inside the time the Commissioner sets. Outstanding balances bear interest at 1 percent a month. The checks are payable to the Workers’ Compensation Trust Fund. The email on the renewal letter and the updates sheet is workerscomptrustfund@dol.vi.gov.

How Gusto and Patriot describe the U.S. Virgin Islands

Confirm the withholding account with the Bureau of Internal Revenue. Confirm the unemployment account with the Department of Labor, after the federal employer identification number and the PIN letter. Confirm the rate on the Department’s notice, because the 2026 release does not print a new-employer percent. Confirm the new-hire file within 20 days, and keep the code’s 12-to-16-day electronic spacing beside the form. Confirm the Workers’ Compensation Trust Fund policy. The fund sells that policy. The payroll vendor does not.

Gusto’s payroll terms say the payroll service is available in the United States, excluding U.S. territories. They also say the business must be registered in the United States, excluding U.S. territories, and the bank account must be there too. Gusto’s add-employees article says Gusto does not support employees living in U.S. territories, and it names Puerto Rico and the U.S. Virgin Islands. Gusto’s state-registration hub is a list of state headings. The headings name the states and the District of Columbia. The U.S. Virgin Islands is not a heading on that hub. Puerto Rico is not a heading on that hub. There is no Gusto article on that hub that walks through Form 501-VI, the employer portal, or the Workers’ Compensation Trust Fund. See Gusto on the directory.

Patriot’s new-employer page by state is a table of registration articles. The table lists the 50 states and the District of Columbia. The U.S. Virgin Islands is not in the table. Puerto Rico is not in the table. The page does not link a U.S. Virgin Islands registration article. Patriot does not claim, on that page, to open a Bureau of Internal Revenue withholding account, a Department of Labor unemployment account, or a Workers’ Compensation Trust Fund policy. See Patriot on the directory.

The gap is the grade. For a first hire in the U.S. Virgin Islands, these two vendors’ published registration lists do not take the three doors off your desk. You still open withholding with the Bureau. You still register unemployment with the Department. You still put the Workers’ Compensation Trust Fund policy in force. You still file the new-hire report. A vendor checklist for a state is not a U.S. Virgin Islands account. Guam does not have this territorial unemployment program. Puerto Rico uses a different stack: SURI, the Department of Labor and Human Resources, and the State Insurance Fund.

What still sits on the employer

• Open withholding with the Bureau of Internal Revenue. Deposit income tax withheld on wages on Form 501-VI, which the booklet calls Form 501VI and the coupon calls Form 501 V.I. Pay the Bureau directly. Under $2,500 of tax liability in the quarter may ride Form 941-VI. A monthly deposit is due on the 15th of the next month. Semiweekly deposits follow the Wednesday and Friday rules on the coupon, with three banking days. A $100,000 day is due the next banking day. The coupon does not print the lookback dollar. Circular E does. File Form 941-VI, which the form face dates April 30, July 31, October 31, and January 31. The booklet instead says the last day of the following quarter. Those dates are not the same. Give each employee Form W-2VI by January 31. Send it with Form W-3SS. The live forms catalog does not list Form W-2VI.
• Notify the Virgin Islands Department of Labor promptly when the business begins. File the Employer Registration. Open the employer portal with the federal employer identification number and the PIN letter. Hold the Virgin Islands employer number. Do not substitute the federal number. Do not substitute the Bureau withholding account.
• Unemployment insurance covers service for an employing unit, generally work for some portion of a day in the current or preceding calendar year, unless the law excludes it. Household and domestic work is covered at $500 of aggregate pay in a calendar quarter in the current or preceding year. The overview does not print a $1,500-quarter or 20-week test as the general rule. File the quarterly wage report by April 30, July 31, October 31, and January 31, even with no wages. A late-report penalty does not exceed $60 a year. Interest is 9.0 percent a year. The 2026 taxable wage base is $32,100. Experience rates run from 2.43 percent to 5.4 percent. The average contribution rate is 4.04 percent. The release does not print a new-employer percent. Use the rate on your notice or on the preprinted quarterly form.
• File the new-hire report with the Department. The form says within 20 days of hire, and it says the start-to-work date is the first day of paid services. 16 V.I.C. § 378 says not later than 20 days after hire or rehire, or 12 to 16 days apart if the report is electronic or magnetic. The form does not print that spacing. The form does not satisfy Form 941-VI. The quarterly unemployment report does not satisfy the new-hire clock.
• Buy the Workers’ Compensation Trust Fund policy. Act 8859 moved that fund to the Department of Labor. The handbook covers persons who work for wages, with a private-home domestic exception and a short home-repair exception. A new employer files the estimated report. The premium uses the first $8,424 of each worker’s wages, and the minimum is $50 per classification. The 2024 memorandum names December 31, 2024. The February 2025 updates sheet and the renewal letter name a September 30 report and a December 31 payment for the current year, and the letter says not to send the payment with the report. The handbook still says the payment accompanies the report. Pay the invoice the fund sends. The unemployment account does not sell this policy.
• Do not copy another state’s clock onto the U.S. Virgin Islands. The territory does not use California’s $100-in-a-quarter test. The territory does not use a 15-day California registration clock. The territory does not use Texas’s rule of no paycheck withholding. The territory does not use Puerto Rico’s SURI account, Puerto Rico’s $7,000 unemployment cap, or Puerto Rico’s 19-day new-hire sentence. The territory does not use the District of Columbia’s Form FR-500, the District’s 2.7 percent rate, or the District’s licensed private insurer. The territory does not use Rhode Island’s one Business Application and Registration, or Rhode Island’s 14-day new-hire report. The territory does not use Maine’s 7-day new-hire report. The territory does not use Guam’s lack of a territorial unemployment program as if it were the Virgin Islands rule.

Also forming a company in U.S. Virgin Islands? Process Score compares registered agents there.