District of Columbia Wage and Payroll Tax Facts
February 05, 2024
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the District of Columbia.
The District of Columbia (D.C.) imposes a substantially higher minimum wage rate than those required by the federal government in the Fair Labor Standards Act (FLSA). In fact, the D.C. minimum wage rates are more than double those of the federally required rates, even across tipped wages and tip credits.
When it comes to processing payroll, D.C.-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- Unemployment Insurance (SUI)
- Paid Family and Medical Leave (PFML)
The below information was last updated July 1, 2024. It is not intended as legal or tax advice.
D.C. Minimum Wage Rates
|
Wage Type |
D.C. Rates |
Federal Rates |
|
Minimum Wage |
$17.50 |
$7.25 |
|
Tipped Minimum Wage |
$10.00 |
$2.13 |
|
Actual Tip Credit |
$7.50 |
$5.12 |
D.C. Income Tax Rates
D.C.'s income tax is progressive, meaning it adjusts based on the income level of the employee paying the tax.
|
Income Tax Bracket |
2024 Income Tax Rate |
| $0 - $10,000 | 4.00% of excess over $0 |
| $10,000 - $40,000 | $400 + 6.00% of excess over $10,000 |
| $40,000 - $60,000 | $2,200 + 6.50% of excess over $40,000 |
| $60,000 - $250,000 | $3,500 + 8.50% of excess over $60,000 |
| $250,000 - $500,000 | $19,650 + 9.25% of excess over $250,000 |
| $500,000 - $1,000,000 | $42,775 + 9.75% of excess over $500,000 |
| $1,000,000 or greater | $91,525 + 10.75% of excess over $1,000,000 |
|
Additional D.C Income Tax Details |
|
|
Supplemental Withholding Computation |
Combine with regular wages for current or prior payroll and calculate the tax on the total. Subtract the tax withheld on the regular wages. |
|
Valid Filing Statuses |
|
|
Exemptions |
|
|
Form W-4 |
Form D-4 |
D.C. Unemployment Insurance (UI) Rates
UI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by local law) and meet D.C.'s eligibility requirements.
|
D.C. UI Tax Details |
|
|
Taxable Wage Base |
$9,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
1.90% - 7.40% |
|
Rates for New Employers |
2.70% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
No |
|
Administrative Funding Assessments |
0.20% |
D.C. Disability Insurance (DI) Rates
DI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. D.C., however, doesn't require employers to collect a DI tax.
Miscellaneous D.C. Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. D.C. currently has reciprocal agreements with the following states:
- Maryland
- Virginia
Residents of these states need to submit Form D-4A to confirm their non-residency.
Paid Sick Leave (PSL) Taxes
D.C. doesn't require employers to collect PSL taxes, but it does have a program providing such leave to eligible employees:
|
D.C. PSL Details |
|
| Covered Employees |
All except the following:
|
| Accrual Method(s) |
Varies based on employer size:
|
| Annual Accrual Maximum |
Varies based on employer size:
|
| Probationary Period | 90 days |
| FAQs | DOES Public Education Campaign |
Paid Family and Medical Leave (PFML) Taxes
Similar to UI, D.C.'s Paid Family Leave (PFL) benefits are funded by employers through a recurring payroll tax. This applies to self-employed individuals who have opted into the PFL program as well as non-profit organizations
Every quarter, employers pay a 0.75% tax on each employee's quarterly gross wages, provided those employees either spend more than 50% of their time working in D.C. or have their employment based in D.C. and don't work more than 50% of their time in another jurisdiction.
D.C. Employer Registration
The below agencies can help with your employer registration, including best practices, account numbers, and unemployment information. Contact the Office of Tax and Revenue for withholding tax topics and the Department of Employment Services for unemployment tax topics.
|
Registration Details |
Office of Tax and Revenue | Department of Employment Services |
|
Phone |
(202) 727-4829 | (202) 698-7550 |
|
Online Registration |
MyTax DC Homepage | DOES Employer Registration Portal |
| Registration Instructions |
Online registration is available. Account numbers will be issued in 3-5 days via online process. Separate account numbers for each tax type will be issued under the combined registration. |
|
| Employer Self-Service Login | MyTax DC Homepage | DOES Employer Login Page |
Additional D.C. Payroll Tax Resources
- Office of Tax and Revenue Business Tax Service Center
- Office of Tax and Revenue Tax Form and Publication Library
- Department of Employment Services Unemployment Insurance Handbook
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.
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