Washington State residents have no income tax to worry about, which means employers don’t have to worry about it either. But there are still two insurance taxes to keep in mind:
- Unemployment insurance tax
- Long-term care insurance tax
Additionally, you should be aware of the Paid Family and Medical Leave program if you have employees living in Washington, as you’ll be required to deduct a percentage from each employee’s gross wages.
Not sure how these taxes affect your payroll processes?
You’ve come to the right place.
Just remember: we’re only covering state payroll insurance taxes here—not any of the federal taxes you still need to worry about. You can learn more about those in our guide to federal payroll forms.
Washington State Income Tax
Washington has no income tax.
Not only that, but the state also has no corporate tax.
The state does levy a capital gains tax, but it only applies to individuals who make over $250,000 a year in capital gains. So, profit from the sale of stocks, cars, boats, and businesses would be subject to this tax. (Real estate and retirement funds don’t count as capital gains here.)
In other words, this tax has nothing to do with payroll. It’s something individuals must file and pay on their own after selling their $399,000 fishing boat or cashing out crypto for hundreds of thousands of dollars.
Washington Unemployment Insurance Tax
Washington levies an unemployment insurance tax that ranges from from 0% to 8.15%. The taxable wage base is $67,600 for each employee.
The formula for how Washington determines an employer’s taxable wage base is complicated. Basically, your rate will depend on two things:
- Payroll size: The number of employees you have and how much they make from you
- Benefits paid out: The amount of unemployment benefits paid out to past employees
Then, there are a couple more factors the state considers—things like the employer’s layoff history over the previous four fiscal years and the social tax all employers must pay to cover general Washington unemployment costs that aren’t linked to a particular employer.
You won’t have to figure these things out yourself, thankfully.
The Washington State Employment Security Department will send out an employer’s rate the December before the year in question. So for 2025, employers will know their rate by the end of December 2024.
For new employers, the Employment Security Department simply states it will apply a rate based on the employer’s industry. In the 2024 tax year, new employers will pay 90% of the average for all businesses in their industry. The minimum rate is 1.0%.
New employers will receive their rate in the mail after registering their business or hiring their first employees.
Washington Long-Term Care Insurance
The Evergreen State’s WA Cares Fund is a hot-button issue with the state’s residents.
The idea behind the fund is this: one day, most people will need support to continue living independently. Sometimes, this need arises earlier in life. Someone might get sick or injured and need a part-time nurse to help care for them for several months after they leave the hospital.
In other cases, the need for long-term care doesn’t come up until much later in life. So the state set up a public long-term care fund that all working residents of Washington must contribute to. The current rate employers must take from payroll is 0.58% of each paycheck.
But the benefit is just $36,500.
To put this in perspective, assisted living costs an average of $4,500 per month in the United States. That’s $54,000 for just one year.
Assuming an elderly person needs long-term care for five years in Washington, the WA Cares benefit isn’t going to do a whole lot.
Consider these limitations, too:
- You must pay into the fund for 10 years in order to access your benefit, with a few exceptions for special cases
- You must meet a care need and contribution requirement before you can apply to use the benefit
- If you must access your benefits before the 10-year time period, you’ll get fewer benefits
- WA Cares makes all the payments on your behalf—you don’t receive a payout
- You lose the benefit if you move out of Washington State
Employees can opt out, but the process is complicated. There are four main reasons the state allows exemptions:
- The employee works inside Washington but lives out-of-state
- The person’s partner or spouse is an active-duty member of the US armed forces
- The employee has a non-immigrant work visa
- The worker is a veteran with a 70% service-connected disability rating or higher
Workers can file for an exemption at any time. If their request is approved by the state’s Employment Security Department, they’ll receive an official approval letter. They must present this to you, their employer, in order to be exempted from the long-term care tax.
Washington Paid Family and Medical Leave
The state of Washington requires all employees and some employers to pay into the state’s Paid Family and Medical Leave fund.
The Paid Leave fund premiums are reevaluated each year. For 2024, the rate is 0.74% up to the Social Security cap of $168,600. Of this percentage, employees must pay 71.43% of the premium and employers the other 28.57%—unless, that is, the business has fewer than 50 employees.
So let’s say a company has 100 employees. One employee makes $70,000 a year. The total premium for the Paid Family and Medical Leave fund in Washington is 0.74% of that, so $518 for the whole year.
Of this amount, the employee pays $370. The employer would pay the other $147.99.
But if an employer has fewer than 50 employees, they don’t have to pay the employer portion of the premium. Employees still have to pay their 71.43%, though. If you feel like taking the fee off their plate, you technically can pay their portion for them.
How to Submit Your Washington Payroll Taxes
You’ll submit Washington’s three payroll taxes in two separate ways.
For unemployment insurance tax, you’ll use the state’s Employer Account Management Services (EAMS) portal. The EAMS portal lets you file quarterly unemployment tax and wage reports and pay withheld taxes.
If you don’t have one already, you’ll start by creating a SecureAccess Washington (SAW) account and then opening an EAMS account. You can find detailed instructions here.
For the state’s Paid Family and Medical Leave tax and the WA Cares Fund tax, you’ll use your SAW account to pay and file the required quarterly reports. The process is a little convoluted, but here are the full instructions. Remember: they apply for both the paid leave and the long-term care insurance premiums.
Even though you will file the reports for the Paid Family and Medical Leave and WA Cares Fund together, you will pay the taxes in two separate payments. This is to make sure the money is credited to the correct fund.
All Washington payroll taxes and reports are due by the end of the month following the end of the preceding quarter. So for Q1—January, February, and March—taxes and reports are due by April 30.
The Official Resources for Washington Payroll Taxes
If you need a quick reference to authoritative sources while you’re running Washington payroll taxes, we’ve got you covered with this list of links:
- Washington Paid Family & Medical Leave
- Washington Paid Family & Medical Leave: Employers
- WA Cares Fund
- WA Cares Fund: Exemptions
- Employment Security Department: Employer resources
- Employment Security Department: Employer resources forms and publications
- SecureAccess Washington (SAW)
- Employer Account Management Services (EAMS)
How to Get Someone to File Your Washington State Payroll Taxes For You
Keeping tabs of Washington’s payroll taxes for every single one of your employees is more than a hassle. It’s a downright nightmare even if you have just one employee.
There are different rules and regulations to follow for each type of payroll tax in the state. If you mess up, you could end up owing fines.
And remember that these are just state payroll taxes. You still have federal unemployment and income taxes to contend with.
That’s why we recommend everyone use a payroll software service. These services give you a unified platform where you can take care of payroll taxes for all of your employees. They’ll also file as much of your payroll taxes automatically as they can. Whatever they can’t file for you, they’ll send you reminders for.
In short, they make your life about a million times easier.
If you’re not sure which payroll software service is best for you, our in-depth guide to payroll software can help.
