Oregon transit and Portland area payroll taxes

Who pays which Oregon local tax

The rates and rules

Statewide transit tax: small, but on everyone

The 0.1% comes out of wages for Oregon residents wherever they work and for nonresidents working in Oregon. It applies even to employees exempt from regular state withholding, but not to self-employment income. You report it quarterly on Form OQ through Frances Online or on paper; agricultural employers may file annually by January 31. Oregon requires the return even when the amount is small.

The rate is not going up. Measure 120 on the May 19, 2026 primary ballot, which carried parts of HB 3991, did not pass, so withholding stays at 0.1%.

TriMet and Lane: where the work happens

Both district taxes follow the work location, not your business address. A Salem company with a crew working on a job in Beaverton owes TriMet tax on those wages; a Portland company's employee working in Bend does not. The Department of Revenue's transit guide lists TriMet at 0.008237 for 2025 and for January 1, 2026 and beyond, so the yearly step-ups appear to be finished. Lane is listed at 0.0080 for the same periods. TriMet lists a penalty of $250 per employee, up to $25,000 per period.

Metro and Multnomah County withholding over $200,000

If you have a location in Metro or Multnomah County, you must withhold these taxes for employees working there who earn $200,000 or more in the calendar year. Employees can opt in below that, opt out, or set an amount. Thresholds for the taxes themselves start at $125,000 single and $200,000 joint; Metro's are indexed to inflation from tax year 2026, but the new amounts were not shown on the Revenue Division page. The Revenue Division page says the Preschool for All rate rises by 0.8% in 2027, without saying which tier or on what date.

• Quarterly returns: April 30, July 31, October 31, January 31.
• Annual reconciliation and electronic W-2s for $200,000+ earners: January 31, with no extensions.
• Penalties: $50 per unfiled W-2, up to $2,500 per jurisdiction, and $100 for a late reconciliation.

Three worked examples

$60,000, works in Portland (TriMet): employee transit tax $60,000 x 0.1% = $60.00; your TriMet tax $60,000 x 0.8237% = $494.22. Paid Leave Oregon at 1% is $600.00, split $360.00 employee and $240.00 employer if you have 25 or more employees. No Metro or Multnomah withholding at this salary.

$60,000, works in Eugene (Lane): employee $60.00; your Lane tax $60,000 x 0.80% = $480.00.

$250,000, works in Multnomah County inside Metro: employee transit tax $250.00; your TriMet tax $250,000 x 0.8237% = $2,059.25. The Revenue Division describes withholding at 1% (Metro) and 1.5% (Preschool for All) on wages over $200,000. Applied to the $50,000 above the line, that is $500.00 and $750.00; confirm the base with the Revenue Division before you set it up.

Put your own numbers into the employee cost calculator, and see unemployment rates on the Oregon payroll tax page and SUTA rates for 2026.

Where Oregon employers slip

• Coding TriMet by headquarters. The test is where the work is performed. A remote employee whose home office sits inside the TriMet district is worth asking DOR about.
• Skipping zero or tiny returns. The statewide transit return is due even when the amount is small.
• Missing a raise over $200,000. Metro and Multnomah withholding begins when an employee working there reaches $200,000 for the year.
• Forgetting the Workers' Benefit Fund. This assessment is charged in cents per hour worked and collected through the same combined payroll return. Its 2026 rate and employee share were not shown on the page we read, so get them from the Department of Revenue.

Ask any payroll provider whether it files TriMet and Lane on Form OQ and files the Metro and Multnomah returns with the City of Portland. OnPay says local filings are included at $49 a month plus $6 per worker (checked October 16, 2026). Compare in our payroll software rankings, or see San Francisco's employer taxes and the payroll tax hub.