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Tax Alert Tax Mid-Year Review
June 16, 2025
At A Glance
The past six months brought many legislative changes, ranging from employment taxes to state withholding tax rates and local minimum wage rates. Below is an overview of what to expect and prepare for from July 1, 2025, through December 31, 2025, including a few retroactive changes.
New Tax Requirements for Employers
Alabama Overtime Exemption
The Alabama overtime pay exemption will expire on June 30, 2025. As a result, overtime pay will be taxable as of July 1, 2025. Employers should use EX OT Wages as the Box 14 identifier on W-2 forms to report the exempt overtime wages from January 1 – June 30, 2025.
Refer to the state’s Department of Revenue website for more information.
Updated Minimum Wage Rates
State Minimum Wage
| Jurisdiction | Effective Date | Minimum Wage | Minimum Cash Wage | Tipped Credit |
| Alaska
| 7/1/2025 | $13.00 | N/A | N/A |
| District of Columbia | 7/1/2025 | $17.95 | $10.00 | $7.50 |
| Florida
| 9/30/2025 | $14.00 | $9.98 | $3.02 |
| Oregon
| 7/1/2025 | $15.05 | N/A | N/A |
Local Minimum Wage
| State | Local Jurisdiction | Effective Date | Minimum Wage | Tipped Minimum Cash | Tipped Credit |
| California
| Alameda | 7/1/2025 | $17.46 | N/A | N/A |
| Pasadena | 7/1/2025 | $18.04 | N/A | N/A | |
| Emeryville | 7/1/2025 | $19.90 | N/A | N/A | |
| Los Angeles | 7/1/2025 | $17.81 | N/A | N/A | |
| Berkeley | 7/1/2025 | $19.18 | N/A | N/A | |
| Freemont | 7/1/2025 | $17.75 | N/A | N/A | |
| San Francisco | 7/1/2025 | $19.18 | N/A | N/A | |
| Milpitas | 7/1/2025 | $18.20 | N/A | N/A | |
| Illinois | Chicago | 7/1/2025 | $16.60 | $12.62 | $3.98 |
| Maryland
| Montgomery County | 7/1/2025 | $17.65 (employers with 51 or more employees) $16.00 (employers with 11 to 50 employees) $15.50 (employers with 10 or fewer employees) | N/A | N/A |
Minnesota | St. Paul | 7/1/2025 | $13.25 (employers with 5 or less employees) $15.00 (employers with 6 to 100 employees) | N/A | N/A |
| Oregon | Portland Metro | 7/1/2025 | $16.30 | N/A | N/A |
| Non-Urban Counties | 7/1/2025 | $14.05 | N/A | N/A | |
| Washington | Renton | 7/1/2025 | $19.90 (employers with 15 to 500 employees) | N/A | N/A |
| Everett | 7/1/2025 | $20.24 (employers with 500 or more employees) $18.24 (employers with 15 to 500 employees) | N/A | N/A | |
| Tukwila | 7/1/2025 | $21.10 (employers with 15 to 500 employees) | N/A | N/A |
State Withholding Tax Changes
| State | New Tax Table Release Date | New Tax Table Effective Date | New Tax Rate |
| Georgia | June 2025 | 7/1/2025; retroactive to 1/1/2025 | 5.19% |
| Idaho | May 2025 | Retroactive to 1/1/2025 | 5.30% |
| April 2025 | 6/1/2025; retroactive to 1/1/2025 | 4.50% | |
Virginia | June 2025 | 7/1/2025 | Updated standard deductions* |
*$8,750 for single filers; $17,500 for married couples filing jointly.
Thank you for choosing Paylocity as your Payroll Tax and HCM partner. This information is provided as a courtesy, may change, and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
Keep Up With Compliance
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