# Vermont pay stubs: income tax and Child Care Contribution

> Vermont paychecks include graduated state income tax and may include a small Child Care Contribution deduction of up to 0.11%. Here is what gets withheld.

Source: https://www.paystubnest.com/states/vermont
State: Vermont (VT)
Published: 2026-09-25
Last reviewed: 2026-10-12
Publisher: PayStubNest.com

## Short answer

A Vermont paycheck has federal income tax, Social Security and Medicare withheld, plus Vermont's graduated income tax. Employers pay a 0.44% Child Care Contribution on wages and may withhold up to a quarter of it, 0.11% of wages, from employees. Vermont has no local income taxes and no state disability deduction.

## State income tax

Vermont has a graduated income tax with several brackets, with bracket amounts adjusted for inflation over time. Employees complete Form W-4VT to set state withholding, and the Vermont Department of Taxes publishes withholding tables each year. Since the rates are progressive, the state line grows noticeably as pay rises, and bonuses can be withheld at a different rate than regular wages.

## Other state payroll deductions

Vermont's newer payroll item is the **Child Care Contribution (CCC)**, collected to fund child care programs:

- Employers pay **0.44%** of wages earned in Vermont.
- An employer may choose to withhold up to 25% of that amount, which is **0.11%** of wages, from employees. They can withhold less or nothing, and do not have to treat every employee the same.
- Self-employed people pay 0.11% on their self-employment income rather than through payroll.

If an employer does withhold part of the CCC, it should appear as its own line on the stub and on the employee's W-2. Vermont has no state disability insurance deduction, and unemployment insurance is paid by employers.

## Local taxes

Vermont towns and cities do not levy income taxes on wages, so there is nothing local to withhold. The same state rules apply whether an employee works in Burlington or a small town.

## Federal withholding still applies

- Federal income tax, based on Form W-4.
- Social Security at 6.2% up to the annual Social Security wage base.
- Medicare at 1.45%, plus 0.9% on wages over $200,000.

## Creating a Vermont pay stub with PayStubNest

Start at [/app/new](https://www.paystubnest.com/app/new), add hours or salary, and select Vermont. The exact figures on each stub depend on the employee's pay, pay frequency, W-4 choices, deductions and year-to-date totals, and PayStubNest calculates all of it automatically: federal and Vermont income tax withholding, plus year-to-date totals that keep running. If you withhold the employee share of the Child Care Contribution, add it as a deduction so it shows clearly. Previews are free and you pay only for downloads.

## Record-keeping tip

Write down your Child Care Contribution policy, meaning how much of the 0.44% you withhold from employees, and apply it the same way each pay period. That makes stubs, quarterly returns and W-2s agree. Details are on the [Vermont Department of Taxes CCC page](https://tax.vermont.gov/business/child-care-contribution), and our [FAQ](https://www.paystubnest.com/faq) covers general stub questions.