Washington Wage and Payroll Tax Facts
August 1, 2023
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 state of Washington.
The Evergreen State requires a substantially higher minimum wage rate than the one required by the federal government. So much higher that it’s over double the amount of the federally required rate.
Moreover, the cities of Bellingham, SeaTac, Seattle, and Tukwila have unique minimum wage rates, which can sometimes adjust based on the employer’s size or whether they offer health benefits.
When it comes to processing payroll, Washington-based organizations must handle the following taxes in addition to those required by the federal government:
- State Unemployment Insurance (SUI)
- Paid Family and Medical Leave (PFML)
- Employer Administration Fund (EAF)
- Washington Cares Fund
The below information was last updated July 28, 2023. It is not intended as legal or tax advice.
Washington Minimum Wage Rates
|
Wage Type |
Washington Rates |
Federal Rates |
|
Minimum Wage |
$15.75 |
$7.25 |
|
Tipped Minimum Wage |
N/A |
$2.13 |
|
Actual Tip Credit |
N/A |
$5.12 |
|
Wage Type |
Washington Rates |
Federal Rates |
|
Minimum Wage |
$15.75 |
$7.25 |
|
Tipped Minimum Wage |
N/A |
$2.13 |
|
Actual Tip Credit |
N/A |
$5.12 |
Local Minimum Wage Rates
In addition to the state-wide minimum wage rates above, some cities have unique minimum wage rates:
|
Location |
Wage Rate |
| SeaTac |
$19.06 |
| Seattle |
$16.50 (small employers; fewer than 500 employees) $18.69 (large employers; 500 or more employees) |
| Tukwila |
$16.99 (mid-size employers; 15 - 500 employees worldwide) $18.99 (large employers; 500 or more employees worldwide) |
|
Location |
Wage Rate |
| SeaTac |
$19.06 |
| Seattle |
$16.50 (small employers; fewer than 500 employees) $18.69 (large employers; 500 or more employees) |
| Tukwila |
$16.99 (mid-size employers; 15 - 500 employees worldwide) $18.99 (large employers; 500 or more employees worldwide) |
These rates apply to the following employer types:
SeaTac
- Hospitality and transportation employers within the city boundaries.
Seattle
- Companies with more than 500 employees globally.
- Companies with 500 or fewer employees globally where workers don't receive tips or healthcare benefits from their employer.
- Companies with 500 or fewer employees globally where workers do receive tips or healthcare benefits from the employer must be paid at least $18.69 an hour in minimum compensation, which is the sum of wages, tips, and the cost to the employer of providing healthcare benefits.
Tukwila
- Large employers with more than 500 employees globally.
- Mid-size employers with 15-500 employees worldwide, or with over $2 million of annual gross revenue in Tukwila.
Washington State Income Tax (SIT) Rates
Washington is one of the few states that does not impose or collect a personal income tax.
Washington State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
Washington SUI Tax Details |
|
|
Taxable Wage Base |
$67,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.33% - 8.33% |
|
Rates for New Employers |
Varies by industry |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be received by February 15 of the tax rate year. |
|
Washington SUI Tax Details |
|
|
Taxable Wage Base |
$67,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.33% - 8.33% |
|
Rates for New Employers |
Varies by industry |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be received by February 15 of the tax rate year. |
Washington State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Washington, however, doesn't require employers to collect an SDI tax.
Miscellaneous Washington Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. Washington currently has no reciprocal agreements with any other states.
Paid Sick Leave (PSL)
The state of Washington requires employers to offer paid sick leave to their employees:
|
Washington PSL Details |
|
| Accrual Method(s) | One hour for every 40 hours worked |
| Carryover Maximum | 40 hours |
| Annual Accrual Maximum | N/A |
| Probationary Period | 90 days |
| FAQ | Washington PSL FAQs |
|
Washington PSL Details |
|
| Accrual Method(s) | One hour for every 40 hours worked |
| Carryover Maximum | 40 hours |
| Annual Accrual Maximum | N/A |
| Probationary Period | 90 days |
| FAQ | Washington PSL FAQs |
Paid Family and Medical Leave (PFML) Taxes
PFML benefits are funded by a 0.8% payroll tax split between employers and employees up to the federal wage base for social security taxes ($160,200 in 2023). Employees will pay 72.76% of that split, while employers will pay the remaining 27.24%, but employers are allowed to pay some of the employee’s portion if they wish.
Small employers with fewer than 50 employees are not required to pay their portion of the tax, despite their employees still being required to pay their portion.
|
Washington PFML Tax Details |
|
| Covered Employees | Employees who worked 820 hours in the state over the course of a year |
| Tax Rate |
0.8% of an employee’s gross wages up to the federal wage base for social security taxes ($160,200 in 2023).
The 0.8% tax is split between employers (27.24%) and employees (72.76%), except for employers with fewer than 50 employees, who are only required to collect and remit the employee’s portion to the state. Employers may choose to pay some of the employee’s portion if they wish. |
|
Washington PFML Tax Details |
|
| Covered Employees | Employees who worked 820 hours in the state over the course of a year |
| Tax Rate |
0.8% of an employee’s gross wages up to the federal wage base for social security taxes ($160,200 in 2023).
The 0.8% tax is split between employers (27.24%) and employees (72.76%), except for employers with fewer than 50 employees, who are only required to collect and remit the employee’s portion to the state. Employers may choose to pay some of the employee’s portion if they wish. |
Employer Administration Fund (EAF) Taxes
Washington requires employers to pay an Employment Administration Fund tax along with their SUI taxes. The specific rate for an organization will be listed on the organization’s tax rate notice.
Washington Cares Fund
The Washington Cares fund is a public, long-term care insurance program designed to provide affordable care to individuals who need assistance with two activities of daily living (ADLs) or one instrumental activity of daily living (IADL).
After the program begins providing benefits on July 1, 2026, any employee who has contributed to the fund for 10 years (or less if nearing retirement or a sudden need arises) may access benefits (up to $36,500 total; adjusted for inflation) to assist with their care.
|
Washington Cares Fund Details |
|
| Covered Employees | Any employee that has earned $10,000 in wages over the course of the prior five years. |
| Covered Employers | All |
| Tax Rate | 0.58% paid entirely by employees |
| FAQs | Washington Cares Fund FAQs |
|
Washington Cares Fund Details |
|
| Covered Employees | Any employee that has earned $10,000 in wages over the course of the prior five years. |
| Covered Employers | All |
| Tax Rate | 0.58% paid entirely by employees |
| FAQs | Washington Cares Fund FAQs |
Washington 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 Security Department for unemployment tax topics.
|
Registration Details |
Department of Revenue |
Employment Security Department |
|
Phone |
(360) 902-5999 | (855) 829-9243 |
|
Online Registration |
https://dor.wa.gov/open-business/apply-business-license | https://esd.wa.gov/employer-taxes/register-your-business |
|
Registration Form |
https://dor.wa.gov/sites/default/files/2022-03/700028_0.pdf | |
|
Registration Instructions |
Online and paper registration available. | Online and paper registration available. Account numbers are issued in 2 days via online process or in 3 weeks via mail. |
|
Employer Self-Service Login |
https://secure.dor.wa.gov/home/Login | https://secureaccess.wa.gov/myAccess/saw/select.do |
|
Registration Details |
Department of Revenue |
Employment Security Department |
|
Phone |
(360) 902-5999 | (855) 829-9243 |
|
Online Registration |
https://dor.wa.gov/open-business/apply-business-license | https://esd.wa.gov/employer-taxes/register-your-business |
|
Registration Form |
https://dor.wa.gov/sites/default/files/2022-03/700028_0.pdf | |
|
Registration Instructions |
Online and paper registration available. | Online and paper registration available. Account numbers are issued in 2 days via online process or in 3 weeks via mail. |
|
Employer Self-Service Login |
https://secure.dor.wa.gov/home/Login | https://secureaccess.wa.gov/myAccess/saw/select.do |
Additional Washington Payroll Tax Resources
- Department of Revenue Business page
- Business Tax Basics Guide
- Business Licensing and Renewals FAQs
- Employment Security Department Employer Resources
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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