Oregon Hourly Paycheck Calculator
In beautiful Oregon, it is easy to enjoy simple pleasures like taking in the majestic mountains and ocean views. What is not nearly as easy is payroll taxes. That’s why we’ve compiled the answers to these frequently asked questions below.
Oregon Payroll Taxes
Is there personal income tax in Oregon?
Answer: Oregon imposes a progressive tax rate on all income earned within the state. Oregon.gov provides a helpful Tax Rate Calculator. You’ll need to withhold state income tax from your employees’ pay.
Are the rates the same for non-residents who work in Oregon?
Answer: Yes, these rates are the same for workers who do not live in Oregon. If you earn income in Oregon, you are required to pay Oregon’s income tax.
As an employer, how do I know how much to withhold from my employees’ paychecks?
Answer: You may need to enlist the services of a payroll tax expert in this department. However, to get started, you will have each new employee fill out an OR-W-4. This form determines the number of allowances and state exemptions available to particular employees—and lets the employee withhold an additional amount if they choose.
The OR-W-4 instructions can be confusing. Oregon.gov has some great resources and in-depth FAQs.
What forms do I need to use when filing payroll withholdings?
Answer: Oregon makes this part reasonably straightforward. You have a few options, but all withholding tax is due quarterly.
- File electronically with the State of Oregon Employment Department’s Frances Online
- File via paper report with Form OQ
- Call into the interactive voice line if you have a quarter with no payroll and no hours worked: 503-378-3981
Please note that at the end of each year, you must file Form WR. This is Oregon’s year-end reconciliation report and must be filed by January 31st following the end of the tax year.
Does Oregon have an unemployment tax?
Answer: Yes. Below are some high-level examples of circumstances in which employers are (or are not) or not subject to unemployment tax.
- Unemployment tax must be paid when the terms below are true—with the exception that this does not apply to employers in the agriculture business or domestic employee business (these are in-home workers, such as cleaners or in-home child care):
- In one calendar quarter, you pay more than $1,000 to employees, or
- In 18 weeks within a calendar year, have one or more employees.
- Employers in the agriculture business:
- In one calendar quarter, you pay cash wages of $20,000 or more to employees, or
- In 20 weeks within a calendar year, have ten or more employees.
- Employers that employ domestic workers:
- In one calendar quarter, pay cash wages of at least $1,000 or more.
What is the unemployment tax rate in Oregon?
Answer: Oregon’s unemployment tax rates for 2022 range from 0.9% to 5.4% on the first $47,700 of an employee’s pay.
What is the minimum wage in Oregon?
Answer: Below is a table of current minimum wage rates:
|Oregon Minimum Wage|
|Date||Standard||Portland Metro||Non-Urban Counties|
|July 1, 2022||$13.50||$14.75||$12.50|
It is worth noting that Oregon’s minimum wage will begin changing based upon inflation each year starting July 1, 2023.
Are there any other payroll taxes for Oregon?
Answer: Yes, there are quite a few. Here’s an overview:
A few cities impose an income tax on their residents, including in Multnomah County. These taxes are typically paid to the city or county directly and are owed by employees who live in the applicable areas.
Eugene has a Community Safety Payroll Tax. Learn more about employee and employer tax rates here.
In Oregon, several of the local taxes are called a “transit tax,” and are paid by the employer based on the amount of gross payroll for services performed within either the Tri-Met, Lane Transit district (LTD), or South Clackamus Transportation District. The Tri-Met area includes parts of Multnomah, Washington, and Clackamas counties. LTD serves the entire Eugene-Springfield urban area as well as several rural areas.
Also: Canby, Sandy, and Wilsonville each impost a a transit tax. Statewide transit tax is calculated based on the employee’s wages as defined in ORS 316.162. Employees who aren’t subject to regular income tax withholding due to high exemptions, wages below the threshold for income tax withholding, or other factors, are subject to statewide transit tax withholding. State transit tax applies to wages of Oregon residents, regardless of where the work is performed. Wages means all salaries, commissions, bonuses, fees, or other items of value paid to a person for services performed within a transit district. These taxes are sometimes paid to the state directly along with the withholding, unemployment insurance taxes and workers benefit fund.
What are Oregon’s Workers’ Compensation rules?
Answer: Requirements to obtain Workers’ Compensation vary by state, this table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the Workers comp audit reports dropdown for more information.
What is the Workers Benefit Fund?
Answer: The Workers Benefit Fund (WBF) tax in Oregon is paid by both employees and employers. Every employer employing one or more subject workers, including the state government or any city, county, district, or agency thereof, is subject to the provisions of the workers’ compensation regulations. Under the provisions of the Workers’ Compensation Law, employers and employees are assessed to support the state workers’ compensation fund. The law is administered by the Department of Consumer and Business Services, who can be reached at (503) 947-7810. This tax is paid to the state directly along with the withholding and unemployment insurance taxes, and some transit taxes.
Is there anything else I should know about Oregon payroll taxes?
Answer: Yes, there’s always more to know! Overall, Oregon attempts to make filing payroll taxes as effortless as possible, and they occasionally update and publish an employer’s guide. This is a comprehensive summary of what you need to know as a new or existing entrepreneur and small business owner in Oregon.
Federal Payroll Taxes
Are employers obligated to pay FICA tax?
Answer: Yes. FICA stands for Federal Insurance Contribution Act. You and your
employees will each pay a portion of this tax.
The FICA tax is made up of the Medicare tax and the Social Security tax.In 2022, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $147,000. The Medicare tax requires each to contribute 1.45% of all wages. See the IRS webpage for details, like maximum thresholds.
Are there any other federal payroll taxes?
Federal unemployment tax:
Like the state, the federal government also has an unemployment tax. It’s called FUTA and it’s an annual tax employers pay on the first $7,000 of each employee’s wages. The FUTA rate for 2022 is 6%, but many employers only have to pay 0.6% each year.
Additional Medicare tax: If you have any employees who earn in excess of $200,000 a year, then you will want to be mindful of this tax. You will have to withhold 0.9% on the excess amount.
How do I know how much to withhold for my employees?
Answer: Similar to each state, you will need to have each employee fill out a Form W-4 when they begin work. This form allows employees to fill in personal information that will allow you to determine the withholding amount. Factors like the number of dependents and tax filing status dictate how much to withhold.
Form W-4s are for you and your records. They will not need to be submitted to the IRS.
Gusto’s Oregon Hourly Paycheck Calculator will give you an idea of how federal and state payroll taxes affect your employees’ paychecks. Our comprehensive payroll services can take the guesswork out of processing your Oregon payroll—leaving you with more time to enjoy doing business in beautiful Oregon.