Understanding how payroll works in Washington is an important part of running a business in the Evergreen State. You’ll need to know how to manage taxes, wages, and benefits so your team can get their paychecks on time.
Gusto has compiled a guide to everything you should know before your next payday. We’ve detailed Washington’s most important tax and payroll regulations, along with how Gusto can help you manage it all.
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Key Washington regulations payroll professionals need to know
Washington minimum wage
The current Washington minimum wage is $13.50 per hour, but it may be higher in certain municipalities. Seattle and SeaTac, for example, have minimum hourly wages of $15.75 and $16.34, respectively.
Tipped employees cannot receive lower than the state minimum wage. However, youth employees may be paid 80% of the minimum wage.
Washington pay stubs
Washington employers must furnish pay stubs on each payday. These must include:
- Hours or days worked
- Pay rate
- Gross wages
- All deductions
- Start and end dates of the pay period
Washington pay periods
Washington employers may pay their employees monthly, semimonthly, bi-weekly, weekly, or more frequently according to these rules:
- Employees paid monthly must be paid on the last day of the month, for at least all wages earned during the first 24 days of the month.
- Employees paid on a more frequent basis than monthly must be paid 10 days after the pay period for all wages earned during the pay period.
Determining time worked in Washington
State law says workers should be paid when they’re required to be on company grounds or another designated work site. Once an employee works more than 40 hours in a week, you need to pay them overtime.
Washington overtime pay and tracking
Nonexempt employees in Washington must be paid time and a half once they work beyond 40 hours in a week. Overtime pay must be paid with the pay period in which the overtime was worked. If overtime cannot be correctly calculated by the end of the pay period, then it may be issued during the second pay period after the pay cycle is complete.
Washington final wage payment
Washington employees must be paid all final wages no later than the end of the current pay period.
Income tax withholding in Washington
Washington does not collect state income tax for individuals or corporations.
Washington benefits
All employees in Washington are entitled to federal Social Security and Family and Medical Leave Act (FMLA) benefits. Additional Washington state benefits regulations include:
- Workers’ compensation: Nearly all Washington state employers must cover employees and independent contractors with workers’ compensation.
- Health insurance: Although Washington state law doesn’t require employers to offer health insurance, the federal Patient Protection and Affordable Care Act (ACA) requires all U.S. employers with at least 50 full-time (or equivalent) employees to provide employee insurance benefits.
- Sick leave: All Washington state employers must provide all full-time, part-time, seasonal, and temporary employees one hour of paid sick leave for every 40 hours worked.
- Paid family leave: Employees that have worked at least 820 hours may receive up to 12 weeks of paid family leave or 12 weeks of paid medical leave, with a combined maximum leave amount of 16 weeks during a 52-week period.
Voting: Washington has an extensive vote-by-mail system and doesn’t require employers to provide time off for voting.
Finding the right payroll provider in Washington—Why Gusto?
1. Unlimited payroll
With Gusto, you can run payroll for your team, as often as you need. With just a few quick clicks, full-time, part-time, contractors, employees paid at different rates, and hourly employees can all be paid on the same schedule through one system. We offer dozens of customizable options so you can choose the right Gusto plan from to fit your needs.
2. Tax filings and paperwork
Gusto streamlines compliance with municipal, state, and federal tax and labor authorities, no matter where in Washington your business is located. Meet your tax-filing and payment obligations through Gusto. And our payroll system stays up-to-date no matter the time of year, which helps you never miss a change in rates or obligations.
The communication is great. Gusto reminds me to run payroll and keep me on schedule.
Christopher Garner, Owner of Viewlands Electric LLC
3. Forms and reports
Going paperless with Gusto. You can use our platform to auto generate forms and reports, including your employees’ W-2s and 1099s, quarterly and year-end tax forms, and customized reporting, all without a printer. We email W-2 and 1099 copies to your team too. And thanks to our e-file, e-sign, and e-fax tools, collecting signatures and sending off forms just takes a few clicks.
4. Employee benefits
Take care of your employees both in and out of the office. Through Gusto’s robust benefits network, you can offer your employees a full suite of employee benefits, such as:
- Medical, dental, and vision insurance
- 401(k) retirement accounts
- Flexible spending accounts
- Commuter benefits
- Life and disability insurance
- And more
Frequently asked questions about payroll in Washington
What does a Washington payroll provider need to track?
Washington payroll providers must track employee pay rates, hours or days worked, gross wages, deductions, and overtime worked and paid.
How often do employees in Washington get paid?
Washington employees must be paid monthly, semimonthly, bi-weekly, weekly, or more frequently. Employees paid monthly must receive their payments by the last day of the month, and employees paid more frequently must be paid by 10 days after their pay cycle ends.
What types of payroll taxes are paid in Washington?
Washington state payroll taxes fall into three categories:
- The Washington state unemployment insurance ranges from 0.13% to 5.72%. That doesn’t include the 0.03% Employment Administration Fund tax.
- Washington paid family and medical leave tax which is deducted from employees. Employers with 50 or more employees must all contribute towards the tax.
Workers’ compensation tax varies by industry and is calculated hourly.
Do employees in Washington pay state taxes?
Yes. While Washington employees do not pay state income taxes, employees must contribute to the paid family and medical leave tax and workers’ compensation tax.
How much does an employer pay in payroll taxes in Washington?
For 2020, Washington state employers must pay state unemployment tax between 0.13% and 7.73% with a wage base of $52,700. New employers state unemployment tax rates range from 1% to 5.4% Workers’ compensation taxes are withheld from employee paychecks. Employers with 50 or more employees must also pay paid family and medical leave tax.
