Washington Hourly Paycheck Calculator
If you live in the state of Washington, you might be a Seattle Seahawks fan. You may also love the short trip to the Pacific Ocean, as well as the proximity to the mountains. There is very little that Washington is lacking. One item that it is lacking is a personal income tax—but there aren’t many complaints about that. This payroll guide will outline some of the other key payroll taxes and paycheck rules employers in Washington will want to know about.
Washington payroll taxes
As an employer in Washington, do I need to withhold personal income tax?
No. Washington is among the group of states that have no personal income tax.
With no personal income tax, is there any other tax I am required to pay in Washington?
Yes. Most notably, SUTA (State Unemployment Tax) will require quarterly payments on employee earnings. Washington employers will pay up to 5.4% on the first $62,500 of each employee’s wage in 2022 for unemployment tax.
What taxes apply if my business is located in Seattle?
As of January 1, 2022, a Seattle payroll tax is charged to businesses with a yearly payroll of $7,386,494 or more and have at least one employee who earns more than $158,282 in wages a year. You can find more information about this new Seattle tax on the City’s website.
What is Washington’s minimum wage?
There is a state minimum wage, but Seattle and the greater metropolitan area have their own minimum wages.
|Minimum Wage in Washington for 2022|
|State-wide||Seattle (employers of 501 or more)||Seattle (employers of 500 or less), if the employer pays partial medical benefits or employee receives tips||SeaTac|
|$14.49 per hour||$17.27 per hour||$15.75||$17.54 per hour|
Am I required to report new hires?
New hires must be reported to the Washington Division of Child Support within 20 days of the date of hire. This is also required for rehired employees. New hires can be reported to the DCS online filing system.
If an employee leaves (voluntarily or involuntarily), when is their final paycheck due?
Final paychecks must be given by the next regularly scheduled payday. This applies to people whose employment is terminated as well as to those who resign voluntarily.
Does Washington require that I provide leave to my employees?
Yes. And there are a few to know about.
First: Washington requires up to 18 weeks of paid leave for medical and family qualifying events for employees who work at least 820 hours a year. This is a state-administered program where employees file claims directly with the State.
This paid leave is funded through a 0.4% tax on employees’ wages that can be split between the employee and employer. But employers with fewer than 50 employees are not required to pay this tax.
Next, Washington employers must provide paid sick leave to employees. Employees must earn at least one hour of paid sick leave for every 40 hours worked. Up to 40 hours of unused sick leave must be allowed to roll over to the following year.
Finally, Washington requires paid or unpaid leave for employees or their family members who are victims of domestic violence.
Are there other Washington payroll taxes and paycheck rules?
Yes. One item of note is overtime laws in Washington. Overtime is paid to hourly employees for hours worked over 40 in a workweek. The rate of pay is at least 1.5 times the employee’s regular hourly rate. However, most agricultural workers are not eligible for overtime pay.
Also, 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.
Federal payroll taxes in Washington
Do I have to pay FICA tax?
Yes. The Federal Insurance Contributions Act, or 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.
What about other federal payroll taxes?
You will want to know about these two 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 most employers only have to pay 0.6% each year.
Additional Medicare tax
This tax is relevant to anyone who makes more than $200,000 in wages for the year. The 2022 tax rate is 0.9%—so you (the employer) will have to withhold 0.9% on wages earned in excess of that $200,000 threshold.
How much do I have to withhold from my employees’ paychecks for federal income tax (FIT)?
You will need to have each employee fill out a Form W-4 when they start working for you. (They should also update the form whenever they have a life event that could impact their taxes—say, having a child, getting married, or getting divorced.) This form is designed for employees to provide personal information that will allow you to determine the level of withholding. Note that these forms are for your payroll records. They do not typically need to be submitted to the IRS.
Withholding amounts are based on several factors, including the number of dependents and tax filing status. If an employee fails to provide a W-4, you’ll need to withhold tax as if they are single with no dependents. If you don’t want to do the math, payroll software makes these calculations quickly.