Best Payroll Services for Virginia Small Businesses (2026): What Virginia Payroll Must Handle
The best payroll service for a Virginia small business is the one that files and pays Virginia's own returns for you, on the schedule your withholding requires. Price matters, but a low monthly fee does not help if the provider leaves Virginia Tax and VEC filings to you. Use that test first, then compare cost.
Virginia payroll taxes come from three places: Virginia Tax for income tax withholding, the Virginia Employment Commission (VEC) for unemployment tax, and the IRS for federal forms. Workers' compensation is a separate issue from payroll filing, and item 3 below explains how it fits. Use the table to check what any provider must handle.
What Virginia payroll must handle
| Obligation | Schedule or threshold | What your provider must do |
|---|---|---|
| Virginia withholding, quarterly | Liability under $100 a month. Form VA-5 due April 30, July 31, October 31 and January 31. | File and pay at the quarterly frequency. |
| Virginia withholding, monthly | Liability from $100 to under $1,000. Form VA-5 due the 25th. | File and pay monthly. |
| Virginia withholding, semi-weekly | Liability of $1,000 or more. Payments on Form VA-15 within three banking days, plus Form VA-16 each quarter. | Make payments on time and file VA-16. Confirm exact thresholds with Virginia Tax. |
| Virginia year-end filings | Form VA-6 and every W-2 or 1099 showing Virginia withholding, due January 31, filed electronically. | File VA-6 and the W-2 and 1099 data with Virginia Tax. |
| VEC unemployment tax | Quarterly report and payment due April 30, July 31, October 31 and January 31. Electronic only. Applies to the first $8,000 of each employee's wages. | File the quarterly report and payment. Check with the VEC for the current rate. |
| Federal payroll returns | Forms 941, 940 and W-2. | Prepare and file federal returns and year-end forms. |
| Paid sick leave (new) | Accrual begins July 1, 2027, first for employers with 50 or more employees. One hour per 30 hours worked, up to 40 hours a year. | Track accrued hours by employee. |
| Paid family and medical leave (new) | Contributions begin April 1, 2028. The VEC sets the rate by October 1, 2027. | Apply the VEC rate once it is set. |
| Minimum wage | $12.77 in 2026, $13.75 in 2027 and $15.00 in 2028. | Update pay rates before each change date. |
Virginia's rules and rates change, so confirm current figures on the agency sites before you rely on them. The items below are listed in no particular order.
1. Online full-service payroll software
Online payroll products are the most common choice for small employers. Examples include Gusto, QuickBooks Payroll, ADP, Paychex and Patriot Payroll. These are named as examples only, not as endorsements. They typically calculate pay, handle direct deposit and generate pay stubs and year-end forms. They do not file Virginia forms automatically, so do not assume a product files VA-5, VA-6 or the VEC report because it runs payroll.
Ask each vendor, in writing, whether it files and pays Virginia withholding at your assigned frequency, files VA-6 and the W-2 and 1099 data with Virginia Tax, and files the VEC quarterly report and payment. The feature you need may sit in a higher tier. Confirm pricing and tier contents on the vendor site, because prices change.
Practical takeaway: Get the Virginia filing answers in an email or contract before you sign.
2. An accountant or bookkeeper who runs payroll
If you already work with a CPA or bookkeeper, ask whether they run payroll for clients. One professional can coordinate payroll, the quarterly VEC report and year-end forms alongside your other books. Get a written quote that lists each filing included, since fee structures vary by firm.
Confirm the same Virginia items you would check with software: withholding frequency, VA-6, the VEC report, and the 2027 and 2028 changes. The engagement letter should name who is responsible for each deadline.
Practical takeaway: Put the filing list in the engagement letter instead of relying on a general promise that payroll is handled.
3. A professional employer organization (PEO)
A professional employer organization (PEO) co-employs your workers, so the PEO and your business share employer responsibilities. Justworks and TriNet are examples. In Virginia, a PEO must register with the Workers' Compensation Commission, and its agreement can include workers' compensation coverage for co-employees.
Workers' compensation remains separate from payroll filing. If the agreement does not cover someone, the client keeps separate coverage for that person. See Va. Code 65.2-801 and 65.2-803.1, and read the coverage section before you sign.
Practical takeaway: Ask the PEO for its Workers' Compensation Commission registration and a written list of the workers its coverage includes.
4. Filing directly with Virginia Tax and the VEC
You can run payroll yourself and file online with Virginia Tax and the VEC at no filing cost. The cost is your time and the risk of a missed date. This route fits businesses with few employees and a stable pay schedule. You still need accurate withholding calculations from a calculator or spreadsheet.
Register as an employer with Virginia Tax and the VEC before your first payroll, then calendar every due date and set reminders at least a week ahead.
Practical takeaway: Build one calendar covering every Virginia withholding, VEC and January 31 deadline before you run your first payroll.
5. Virginia withholding: your frequency depends on your liability
Virginia assigns withholding filing frequency based on your liability. Quarterly applies when liability is under $100 a month. Monthly applies from $100 to under $1,000, with VA-5 due on the 25th. Semi-weekly applies at $1,000 or more. Returns are electronic and due even when no tax is owed. Employers with no more than five employees may request a waiver from semi-weekly filing.
Your frequency can change as payroll grows, so check it each year. Ask any provider how it tracks the change and whether it will switch your filing frequency without a reminder from you.
Practical takeaway: Confirm your assigned frequency with Virginia Tax and write it into your provider contract.
6. VEC unemployment tax and the new-employer rate
Unemployment tax is reported and paid to the VEC each quarter, on April 30, July 31, October 31 and January 31. Reports and payments are electronic only, and the tax applies to the first $8,000 of each employee's wages. The VEC's FAQ gives new employers an initial base rate of 2.5 percent plus add-ons. Check with the VEC for the current rate on your account.
Do not budget from an old figure you found online. Ask each provider whether its quarterly VEC report and payment are included in its plan, and whether it applies your account rate automatically.
Practical takeaway: Get your account rate from the VEC and confirm in writing that the quarterly filing is included.
7. The 2027 and 2028 payroll changes
Paid sick leave begins to accrue July 1, 2027, first for employers with 50 or more employees. Employees accrue one hour for every 30 hours worked, up to 40 hours a year. Your payroll system must track those hours, so ask providers how they handle accrual by employee.
Paid family and medical leave contributions begin April 1, 2028, and the VEC sets that rate by October 1, 2027. Payroll software pays the rate you enter, so minimum wage updates remain your job even when a provider handles the filings.
Practical takeaway: Ask for a written plan covering sick leave from July 1, 2027, contributions from April 1, 2028, and each minimum wage step, then confirm the details with the VEC.
8. Local BPOL license tax, which payroll does not file
Virginia has no general statewide business license, and the State Corporation Commission issues none. The local license is the Business, Professional and Occupational License (BPOL) tax under Va. Code 58.1-3700 et seq., set and administered by each locality, usually through the Commissioner of the Revenue. Not every locality levies a general license, because Va. Code 58.1-3704 allows a locality to levy none. Stafford County and Fluvanna County are examples of localities without a general county license.
Payroll services do not file BPOL. Localities set their own rates and deadlines. The population-based floor limits what a locality may require: a locality over 50,000 people cannot require a license for gross receipts under $100,000, one with 25,000 to 50,000 people cannot require one under $50,000, and no floor applies under 25,000. Localities over 50,000 people may waive the license for lower receipts, and that waiver ceiling should be verified with your locality.
Practical takeaway: Call your locality's Commissioner of the Revenue to ask whether a BPOL license applies to your business and when it is due.
How to choose: questions to put in writing
Compare the answers, not the marketing. Affordable payroll services for Virginia are the ones that cover your required filings at a cost you can keep paying, so price is the final filter, not the first.
- Do you file and pay Virginia withholding at my assigned frequency?
- Do you file VA-6 and the W-2 and 1099 data with Virginia Tax by January 31?
- Do you file the VEC quarterly report and payment?
- How will you handle paid sick leave accrual from July 1, 2027, and paid family and medical leave contributions from April 1, 2028?
- Do you support 1099-NEC filing for contractors?
- Does your system connect to my accounting software?
- What support do you offer, through which channels, and during which hours?
- What does each tier include, and what is the current price? Confirm on the vendor site.
Ask about new-hire reporting too. Check with the Virginia Division of Child Support Enforcement for the current requirement and deadline before your first hire. Be cautious of any provider that answers yes without naming the Virginia forms it will file.
Disclaimer and where to get help
This article is informational and is not legal or tax advice. Virginia payroll rules, rates and dates change, so confirm current details with Virginia Tax (https://www.tax.virginia.gov/), the VEC, the IRS, the Workers' Compensation Commission and your locality's Commissioner of the Revenue. For complex situations, such as worker classification, a PEO contract or unusual pay arrangements, consult a qualified CPA or attorney. Help is also available through the Virginia Small Business Development Center network at https://www.virginiasbdc.org/.