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Washington Wage and Payroll Tax Facts

February 02, 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 state of Washington.

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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:

The below information was last updated January 31, 2024. It is not intended as legal or tax advice.

Washington Minimum Wage Rates

Wage Type

Washington Rates

Federal Rates

Minimum Wage

 $16.28

$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 as well:

Location

Wage Rate
SeaTac

$19.71
Seattle $16.50 (small employers; fewer than 500 employees)
$19.97 (large employers; 500 or more employees)
Tukwila $18.29 (mid-size employers; 15 - 500 employees worldwide)
$20.29 (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

$68,500

Employee Subject to Tax

No

Rates for Experienced Employers

0.27% - 8.15%

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.
Employer Administration Fund Varies (will appear on organization's tax rate notice)

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 who live and work in different states are only required to pay taxes to the state where they live. Washington currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in Washington 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.

Paid Sick Leave (PSL) Taxes

The state of Washington doesn’t require employers to collect PSL taxes, but it does have a program requiring such leave for eligible employees:

Washington PSL Details
Covered Employees All except for doctors, lawyers, dentists, or salaried executive managers
Covered Employers All
Accrual Method(s) 1 hour per 40 hours worked
Carryover Maximum 40 hours
Annual Accrual Maximum None
Probationary Period 90 days
Frontloading Allowed Yes
FAQs Washington PSL FAQs

Paid Family and Medical Leave (PFML) Taxes

Like SDI, Washington’s PFML program is funded via mandatory payroll deductions and employer contributions.

Washington PFML Details
Covered Employees Any who worked 820 hours in the state over the course of a year, except for federal employees, tribal business employees, and the self-employed 
Covered Employers All
Amount of Leave
  • Up to 12 weeks
  • Up to 16 weeks if an employee experiences more than one qualifying event in a single year
  • Up to 18 weeks if an employee experiences a condition in pregnancy that causes incapacity
Tax Rate 0.74% of each employee’s wages (split 28.57% / 71.43% between employers* and employees respectively)
Wage Base Limit $168,600
Wage Replacement Up to 90% of weekly wages until reaching the maximum benefit rate
Maximum Benefit Rate $1,456 per week

*Employers with fewer than 50 employees are only required to collect and remit the employee’s portion of this rate, though they can choose to pay some of the employee portion if they wish.

Washington Cares Fund Taxes

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).

Also like SDI, this program is funded via mandatory payroll deductions, and employees can begin filing claims on July 1, 2026.

Washington Cares Fund Details
Covered Employees All except for federal employees, tribal business employees, and the self-employed
Covered Employers All
Eligibility Requirements

There are three ways to gain eligibility:

  • Lifetime Access to Full Amount: Contribute for 10 qualifying years* without a break of five or more consecutive years
  • Early Access to Full Amount: Contribute for 3 qualifying years out of the prior 6 leading up to the filed claim
  • Lifetime Access to Partial Amount: Those close to retirement who were born before January 1, 1968, can access 10% of the full amount for each qualifying year with contributions
Tax Rate 0.58%
Maximum Benefit Amount $36,500
FAQs Washington Cares Fund FAQs

*Any year an individual works 500 or more hours while making contributions to the fund.

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

 Business Licensing Wizard

Registration Form

 Form 700 028

Registration Instructions

 Online and paper registration available.

Employer Self-Service Login

 My DOR Login Page EAMS Login Page

Additional Washington Payroll Tax 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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