Nebraska Economy Overview

Currency

United States Dollar (USD)

Working hours

40 hours/week

Public/bank holidays

12 public holidays

Capital

Lincoln

Languages

English 

Population

Approx. 2 million

Minimum hourly salary

$12 (USD)

Tax year

1st Jan – 31st Dec

Date format

MM/DD/YYYY

Misclassification penalties

In Nebraska, worker misclassification—such as labeling employees as independent contractors to avoid taxes or benefits—can result in serious financial and legal consequences. Employers may face back payment of wages, taxes, unemployment insurance, and workers’ compensation. Civil penalties can be imposed by the Nebraska Department of Labor, especially if misclassification is found to be intentional. Repeat violations or failure to comply with corrective orders may escalate enforcement measures.

Fun fact

Nebraska is the only U.S. state with a single-house (unicameral) legislative system—and it’s also nonpartisan, meaning party affiliation doesn’t appear on ballots.

Nebraska is a state that businesses want to expand in for its supportive professional climate, economic stability, and driven labor force. When it comes to the costs of doing business, Nebraska has consistently ranked in the top 10 U.S. states for affordability and growth opportunities. 

Owing to Nebraska’s infrastructure, consisting of railways, highways, airways, and waterways, business transportation and networking are easier and more economical. Furthermore, the state offers all-sized businesses access to resources, such as the Nebraska Business Development Center (NBDC) and the Nebraska Department of Economic Development (DED), which offer grants and initiatives. 

Doing business in Nebraska can support your expansion goals, but whether you are incorporating a subsidiary or hiring a workforce, you must always comply with Nebraska labor law and business regulations. 

To simplify this process, discover the benefits of expanding your workforce in Nebraska and how an Employer of Record (EOR) or recruitment agency can compliantly and efficiently hire local top talent. 

Overview of Nebraska's Economy

Nebraska’s economy is stable, and its GDP reached $144.18 billion in 2023. Several key sectors contribute to its year-on-year economic growth, including real estate, finance and insurance, agriculture, and government services.

Economic Indicator
Details
GDP (2024 Estimate)
~$150 billion USD
GDP Growth Rate
~2.2% annually
Major Industries
Agriculture, manufacturing, transportation, insurance, and food processing
Top Employers
Union Pacific, Berkshire Hathaway, University of Nebraska, CHI Health
Labor Force Size
~1.05 million
Unemployment Rate
~2.3% (among the lowest in the U.S.)
Business Incentives
Tax credits (Nebraska Advantage Act), R&D incentives, workforce training grants
Key Economic Drivers
Corn and beef production, insurance/financial services, logistics hubs

Interestingly, Nebraska has earned the title “Cornhusker State” because it is the third major producer of corn nationally. In 2023, corn production revenue reached approximately $8.6 billion, contributing to economic growth in the state.

Nebraska’s economic forecast remains positive, with strength remaining in the farm sector and growth expected in non-agricultural industries, including entertainment and healthcare.

Taxes

Employer Tax: 9.50% – 20.30%

Social Security (FICA)

6.2%

Medicare (FICA)

1.45% (on all wages, plus an additional 0.9% for wages exceeding $200,000)

Federal Unemployment Tax (FUTA)

6% on the first $7,000 of wages (can be reduced with state credits to as low as 0.6%)

State Unemployment Insurance (SUI)

0.00% – 1.9% (applied for positive rated employers on the first 9,000 USD)

5.40% (applied for negative rated employers on a taxable wage base of 24,000 USD)

Employee Tax: 7.65%-8.55%

Social Security (FICA)

6.2% (applied on salary up to 176,100 USD)

Medicare (FICA)

1.45% (on all wages, plus an additional 0.9% for earnings above $200,000)

Income tax

Nebraska’s individual income tax rates range from 2.46% to 5.20%, depending on income and filing status. This represents a reduction from the previous top rate of 5.84% in 2024, as part of a phased plan to lower the top rate to 3.99% by 2027.

Gross income

0 – $4,030

$4,030 – $24,120

$24,120 – $38,870

More than $38,870

Tax Rate

2.46%

3.51%

5.01%

5.20%

Business Regulation in Nebraska

Nebraska’s business regulations are fairly straightforward, making it easier for international entities to expand their workforce or register a local company. Learn the procedure you should follow to set up a legal entity or operate in the state by adhering to tax policies.

Business Registration Procedures

To operate a business in Nebraska, you must register with the Nebraska Department of Revenue and the Department of Labor. The process is simplified with online registration or involves filing a Nebraska tax application. Companies must register a business name and submit documents such as Articles of Incorporation.

Registering with the Department of Revenue is necessary when hiring a workforce for tax purposes. The Nebraska Department of Labor governs labor

Tax Policies

In Nebraska, businesses pay a 5.5% state sales and use tax. The state imposes corporate income tax on corporations that generate revenue from their federal taxable income based on sources in Nebraska. Corporations that do not have to pay corporate income tax are those that fall under 15 U.S. Code § 381 and S corporations. Certain financial institutions are also exempt.

Corporate income tax is calculated based on taxable income. If a business has a taxable income over $100,000, the tax rate is 5.58% plus 7.25% of the amount over $100,000.

According to Nebraska’s tax policy, any grants received from government programs are governed by the federal tax code. Grants from local stabilization programs are part of gross income and subject to income tax.

Investment Incentives

To encourage foreign investment and business development in the state, Nebraska offers incentives in the form of tax credits and grant programs. These incentives are available for registered corporations and LLCs in the state.

Popular tax credits include the Nebraska Advantage Microenterprise Tax Credit Act, which provides a 20% refundable tax credit of up to $20,000. The tax advantages aim to develop industries and individual businesses.

What Are the Benefits of Doing Business in Nebraska?

From steadfast economic growth to a favorable business climate, there are many reasons to do business in Nebraska. A closer look at the benefits of operating in the state can help you make informed decisions when registering a business or expanding your workforce.

  • Diverse economy: Nebraska’s strengths lie in the real estate and leasing sector; however, the state has a diverse economy with industries such as agriculture, financing, manufacturing, and telecommunications contributing to GDP. The diverse economy creates resilience, protecting companies from major economic downturns. The economy attracts a broad range of skills in different sectors, fostering talent, innovation, and growth.
  • Affordable business operations: In 2025, the costs of business operations in Nebraska are 8% below the national average. It is one of the most affordable states to do business and is considered a right-to-work state. This means that employees may not be forced to join or support trade unions as a requirement for employment.
  • Tax credits and grants: A significant benefit of operating a business in Nebraska is access to a multitude of tax credits, resources for small business development, and grant programs.

What Are the Downsides of Doing Business in Nebraska?

Before doing business in Nebraska, understand the possible downsides of expansion in the state to make informed investment decisions.

  • Industry-specific tax credits: Most of the tax credits in Nebraska are available to businesses to encourage growth in specific industries. This means that tax credits are limited to qualifying sectors. Corporations and SMEs are encouraged to learn of Nebraska’s various tax credit and grant programs to take advantage of reductions, refunds, and exemptions.
  • Need for improved infrastructure: Despite Nebraska’s leading transportation infrastructure, the state requires improvements in the condition of bridges and roads, particularly in rural areas, to facilitate business.
  • Tight labor market: Corporations and smaller enterprises may find retaining and placing skilled workers challenging. Partnering with professional recruiters can help businesses of all sizes find qualified employees in different industries.

International Expansion into Nebraska

For international expansion in Nebraska, you can register a subsidiary or partner with third-party service providers, such as an EOR, PEO, or recruitment agency. Determine which is best for your business by considering the options below: 

Nebraska Employer of Record (EOR)

A Nebraska EOR offers a broader scope of services for clients looking to expand their workforce in the state. Fortunately, you have the flexibility to test the Nebraska market by hiring an EOR to act as the legal employer of your workforce. You do not require a legal entity to expand your business in Nebraska when you partner with an Employer of Record. Additional services provided by an EOR include benefits administration, payroll, onboarding, employment contract termination, and compliance with labor laws.

Recruitment Agency

A Nebraska recruitment agency partners with client companies to find skilled and qualified employees based on the job requirements. Professional recruiters connect employers to a network of talented job candidates and assist with shortlisting, interviews, and screening potential hires.

Nebraska Professional Employer Organization (PEO)

A Nebraska PEO can assist companies with outsourcing services such as HR functions, payroll, and benefits administration. PEOs assist small to medium-sized companies without an HR team or little experience in managing payroll. Also known as a co-employer, a PEO keeps businesses compliant with paying wages, taxes, and benefits. In Nebraska, you must have a registered business, such as an LLC or corporation, to hire PEO services.

Subsidiary Incorporation

Incorporating in Nebraska follows these steps: 

  • Choose a business name that adheres to the Nebraska Secretary of State’s guidelines. 
  • File formation documents, such as Articles of Incorporation. 
  • You must apply for an EIN with the IRS if you do not have a tax number. 
  • All companies must register with the Department of Revenue. 
  • Business licenses are issued based on the industry; for example, a state license is required for operations in healthcare and construction. 
  • Open a bank account in the state. 

The Nebraska One-Stop Business Information System simplifies business registration and creation by requiring applicants to complete an online questionnaire.

Branch Registration

To register a branch in Nebraska and take advantage of an affordable and efficient expansion solution, you must apply for a Certificate of Authority with the Secretary of State. The certificate is for all businesses, including international companies interested in expanding in the state. 

Staffing Agency

A staffing agency can help you find and place both temporary and permanent staff. They also connect employers to contract workers and advise on processes such as compliant hiring, onboarding, and matching employee skills to the available job. Furthermore, they offer direct hiring services, which means placing employees in permanent job roles.

Business Opportunities in Nebraska

Nebraska’s economy is deeply rooted in agriculture and manufacturing, but its growing tech scene and logistics infrastructure are attracting a broader range of investors. With low business costs, central U.S. access, and a strong workforce, Nebraska presents profitable opportunities across traditional and emerging sectors. Entrepreneurs seeking stable returns and sustainable operations will find Nebraska a business-friendly environment with long-term potential.

Business Opportunity
Reason for Opportunity
Agribusiness and Food Processing
Nebraska is a national leader in cattle, corn, and soybeans. Food production and meat processing benefit from established supply chains and global demand.
Renewable Energy
With abundant wind and solar resources, Nebraska offers strong incentives and infrastructure for clean energy investment, especially wind farms.
Logistics and Warehousing
Its central U.S. location and access to major rail and highway systems make Nebraska ideal for regional distribution and storage facilities.
Tech Services and Data Centers
Low power costs, available land, and reliable infrastructure have attracted tech firms and data centers, particularly in Omaha and Lincoln.
Healthcare and Senior Services
An aging population and demand for rural healthcare services create strong potential for senior care facilities, clinics, and wellness businesses.

Whether you’re expanding in food production, technology, or clean energy, Nebraska offers a stable, cost-effective environment with long-term viability. For companies looking to scale while staying compliant with local employment laws, partnering with a trusted recruitment or EOR provider can make market entry even smoother.

Expand into Nebraska with RemotePeople

Nebraska is known for its business-friendly initiatives and lower cost of operations. The state provides many tax credits and incentives to support business development and economic growth. Incentives range from funding for start-ups to the absence of state and property taxes. 

The Cornhusker State is the third-largest producer of corn and has a diverse economy to minimize shocks when a single sector is affected by external market factors. 

Nebraska is also home to some of the world’s leading companies, including Valmont Industries, Union Pacific, and Berkshire Hathaway. 

Once you have decided to expand your workforce in Nebraska, the next step is to find and place local top talent. Partnering with service providers such as an EOR or recruitment agency in Nebraska can simplify this process, making it easier and more affordable to find the right team. 

To place a compatible and driven workforce today, speak to the international recruitment providers at RemotePeople. The talent acquisition experts have assisted their clients for many years with seamless market entry and in placing the most talented employees. 

Contact us today to explore how we can help you have a successful expansion into Nebraska.