Washington payroll taxes for employers (2026)

What makes Washington payroll different

Paid Family and Medical Leave. The 2026 premium is 1.13% of wages up to $184,500. Employees pay 71.43% of it and employers 28.57%, but employers with fewer than 50 employees owe no employer share. They still withhold the employee share. ESD had not announced the 2027 rate when we checked.

WA Cares Fund. Employees pay 0.58% of all wages, with no cap, for long-term care. You withhold it from everyone except employees who show you an ESD-approved exemption.

Workers comp from L&I only. Washington is a monopolistic state (our research lists it that way, but the L&I pages we read did not say so in plain words). Coverage comes from the Department of Labor and Industries (or self-insurance), and it applies to all employment with no headcount threshold, apart from exclusions in RCW 51.12.020 such as some domestic workers, sole proprietors and partners, and certain corporate officers and LLC members. L&I publishes its State Fund rates per hour worked rather than as a share of wages (L&I rate tables, search result checked October 17, 2026); we could not confirm the 2026 rates or how much of the premium can be deducted from pay.

PEOs report every client to ESD. There is no separate PEO license. The PEO and each client register with ESD, and the PEO files a client report within 30 days of every new or ended client plus quarterly reports (RCW 50.12.300).

Pay rules. Employees must be paid at least monthly. Final wages, for firing or quitting, are due at the end of the established pay period (RCW 49.48.010). The minimum wage is $17.13 with no tip credit, rising to $17.73 on January 1, 2027 ($15.07 for ages 14 and 15). See minimum wage rates by state.

There is no city wage income tax. We have not researched the Seattle payroll expense tax, so check it if you have staff in the city.

Washington employer payroll facts at a glance

Registering as an employer in Washington

1. Get an EIN from the IRS.
2. Apply for, or update, your Washington business license through the Business Licensing Service and say you have employees. ESD creates your unemployment account from that filing and mails the account details within two business days. There is no separate ESD sign-up.
3. Open an L&I workers comp account before work starts.
4. Report new and rehired employees to ESD within 20 days of hire.
5. Set up PFML and WA Cares deductions, and decide whether your headcount (50 or more) means you also pay the employer PFML share.

Washington cost example for a $50,000 employee

Because $50,000 is below the $78,200 base, your whole salary is taxed for unemployment. ESD does not publish one new employer rate, so the table shows what each percentage point of your assigned rate costs.

Take the rate from your ESD notice and multiply it by $500 for each point. The employee side carries the leave and care premiums:

Compare Washington's base with every other state on the 2026 SUTA table, or run your own numbers below. The calculator cannot fill in a Washington new employer rate, so enter the one on your notice.

Payroll software and PEOs for Washington

Check that a provider handles PFML (including the under-50 exemption), WA Cares exemptions and L&I hours reporting, because L&I reports are filed quarterly with L&I, not with ESD. Gusto starts at $49 a month plus $6 per person for single-state payroll (checked October 16, 2026). If you have staff in Oregon, which runs its own Paid Leave Oregon program, check multi-state pricing too. See our payroll provider rankings.

For PEOs, start with Washington PEO pricing and ESD reporting and PEO scores.