Georgia's Flat Income Tax in 2026: What Employers Need to Know About Withholding Changes

Applies to: Every employer with employees who work or live in Georgia — regardless of where your company is headquartered. This is a 🍑 Georgia-specific update.

Georgia's income tax landscape is shifting fast. The state transitioned from six graduated brackets to a single flat rate in 2022, and that rate has been dropping ever since. If you have employees in Georgia, here's what you need to know for 2026 — and what might change before the year is over.

The Timeline: How Georgia Got to a Flat Tax

Year Rate What Happened
Pre-2022 1% – 5.75% Six graduated brackets
2022 5.49% HB 1437 — Switched to flat tax
2024 5.39% HB 1015 — Retroactive rate reduction
2025 5.19% HB 111 — Signed April 2025, accelerated cut
2026 5.09% → 4.99%? Automatic 0.10% cut + HB 1001 proposes jump to 4.99%

What's Happening in 2026

Two things are in play:

1. The Automatic Rate Reduction

Under HB 111 (signed April 2025), Georgia's flat income tax rate automatically drops by 0.10% per year until it reaches 4.99% — as long as the state meets certain revenue targets. This means the 2026 rate should be 5.09% (down from 5.19%).

2. Governor Kemp's HB 1001: Accelerate to 4.99%

Governor Kemp has proposed HB 1001, which would skip the gradual reductions and drop the personal and corporate income tax rate straight to 4.99%, retroactive to January 2026. The Georgia Department of Audits & Accounts estimates this would reduce state revenue by approximately $797 million per year.

⚠️ Watch this space: The 2026 Georgia legislative session has multiple competing tax bills. Some propose going as low as 3.99%, and there's even a Senate special committee that studied fully eliminating the state income tax. The final rate for 2026 could change before the session ends. We'll update this post as legislation is signed.

What This Means for Employers with Georgia Employees

Withholding Tables Will Change

When a rate change is finalized, the Georgia Department of Revenue will publish updated withholding formulas. Every employer withholding Georgia state income tax must apply the new rates.

No Local Taxes — That Part Is Easy

Unlike states like Ohio (600+ municipal income taxes) or Indiana (92 county tax rates), Georgia has zero city or county income taxes. There's one flat state rate, one Form G-4, and that's it. This makes Georgia payroll simpler than many other states.

Standard Deduction Increases

Georgia has also been increasing standard deductions, which affects how much income is subject to withholding:

Filing Status Standard Deduction
Single $12,000
Married Filing Jointly $24,000
Head of Household $18,500

Other Georgia Employer Updates for 2026

Unemployment Tax Rates

The Georgia Department of Labor has released 2026 employer tax rate notices (DOL-626) on the Employer Portal. Important: these are now digital only — they will NOT be mailed. Employers must log into the Georgia Employer Portal to view their rate. New employers use the standard rate of 2.7%.

New Hire Reporting

Georgia requires all new hires and rehires to be reported within 10 days of their hire date. This is done through the Georgia New Hire Reporting Center. iSolved automates this entirely.

Workers' Compensation

Georgia requires workers' compensation coverage for employers with 3 or more employees (including part-time and seasonal workers). This hasn't changed, but it's worth confirming your coverage is current.

One Big Beautiful Bill Act — Georgia Hasn't Adopted It Yet

The Georgia Department of Revenue has noted that the state has not yet adopted the federal tax law changes from the One Big Beautiful Bill Act (signed July 4, 2025). This means Georgia may not conform to all federal changes — including the overtime tax deduction — until the legislature acts. Check Georgia DOR for updates on federal conformity.

✅ iSolved handles all of this. When the Georgia DOR publishes updated withholding formulas, iSolved People Cloud automatically updates the tax tables. New hire reporting is automated. Unemployment tax rates are applied when your DOL-626 is loaded. As a BlueWave HR client, you don't need to manually track any of these changes — we've got it covered.

Need to Update Form G-4?

If employees need to update their Georgia withholding, they should file a new Form G-4 (State of Georgia Employee's Withholding Allowance Certificate). In iSolved, employees can update this through the self-service portal without needing to fill out a paper form.

FAQ

What is Georgia's income tax rate for 2026?

The current rate is 5.19% (for 2025). Under existing law, it will automatically drop to 5.09% in 2026 if revenue targets are met. Governor Kemp's HB 1001 proposes accelerating to 4.99% retroactive to January 2026. Additional bills in the 2026 session could affect the final rate.

Do Georgia employers need to update withholding tables?

Yes, when the Georgia DOR publishes updated formulas. If you use iSolved or another major payroll platform, the rate update is applied automatically — no manual action required.

Does Georgia have local or city income taxes?

No. Georgia does not have any city or county income taxes. There's one flat state rate that applies to all employees regardless of location within Georgia.

Have Georgia Employees? Let Us Handle Compliance.

BlueWave HR is headquartered in Cherokee County, Georgia. We know GA payroll inside and out — from withholding changes to unemployment tax rates to new hire reporting.

Talk to a Georgia Payroll Expert
🍑 Georgia Income Tax Withholding Flat Tax HB 1001 Employer Compliance 2026
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BlueWave HR Team

BlueWave HR provides full-service payroll and human capital management for small and mid-size businesses, powered by iSolved People Cloud. With offices in Canton, GA, Fort Lauderdale, FL, and Indianapolis, IN, we deliver enterprise-grade technology with the personal touch of a local team.