Oregon Wage and Payroll Tax Facts

Miscellaneous Oregon 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. Oregon currently has no reciprocal agreements with any other states.

This doesn't mean, however, that interstate workers living in Oregon pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Quarterly Combined Tax Report

Oregon uses a combined tax report (Form OQ) for employers to calculate and pay the following taxes each quarter:

• SIT and SUI
• Transit taxes
• Paid Family and Medical Leave taxes
• Workers' Benefit Fund

Employers often submit Form Oregon Schedule B and Form 132 (Employee Detail Report) with a Form OQ submission:

• Oregon Schedule B Form - Used if SIT deposits must be submitted semi-weekly or on a one-baking day basis.
• Form 132 - Reports the total gross wages of each Oregon employee. 

Paid Sick Leave (PSL)

Oregon doesn't require employers to collect PSL taxes, but the state does have the following program:

Oregon Family Leave Act (OFLA)

OFLA doesn't require employers to collect a tax, but the law does provide protected, unpaid leave to eligible employees. 

Paid Leave Taxes

In addition to the OFLA, Oregon's Paid Leave program is a separate benefit funded via mandatory payroll deductions. While the program applies to all full-time, part-time, and seasonal employees, the self-employed, independent contractors, and Tribal governments are not automatically covered. Those groups can choose to enroll in coverage if they wish. 

*Large employers with 25 or more employees provide 40% of this amount, while their employees cover the remaining 60%. Small employers with fewer employees don't have to share this tax with employees but may choose to if they wish. 

State and Local Transit Taxes

The state, and several local areas, also require a transit tax based on where an employee performs their work. While the 0.1% statewide transit tax is paid by resident and nonresident employees working in Oregon, the local versions are covered by employers:

Rates are a percentage of the employee's gross wages.

Workers' Benefit Fund

The Worker's Benefit Fund helps provide return-to-work assistance, benefits to permanently and totally disabled workers, and benefits to family members of workers who die from workplace injuries or diseases.

Employers and employees split this payroll tax evenly, at a rate of $0.22 per hour the employee worked. Employers can choose to pay the collected amounts to the state annually or every quarter.

Oregon Employer Registration

The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Employment Department for unemployment tax topics.