Washington, DC payroll taxes for employers (2026)

What sets DC payroll apart

An employer-only leave tax

DC Paid Family Leave has been 0.75% of covered employee wages since July 1, 2024, up from 0.26%, and every 2026 quarter is at 0.75%. You cannot deduct any of it from pay. The maximum weekly benefit is $1,100. On a $50,000 salary the tax is $375 a year, which is more than DC unemployment tax on the same worker.

A new employer rate that is a floor

DOES charges new employers 2.7% or the prior-year average employer rate, whichever is higher. Experienced rates run from 1.90% to 7.40% (US Department of Labor summary). Bloomberg Tax (January 28, 2026) reports a 0.2% administrative funding assessment on top; we did not find it on a DOES page.

A minimum wage above every state's

DC's minimum wage rose to $18.40 on July 1, 2026 (from $17.95), and the tipped cash wage to $10.30. That is above every statewide minimum in our data, though some cities such as Denver are higher. It adjusts each July 1 by CPI; the 2027 figure is not out yet. Compare it in the 2026 minimum wage table.

Pay timing

• Pay at least twice a month, no more than 10 working days after the pay period ends. Bona fide executive, administrative and professional staff may be paid monthly (DC Code 32-1302).
• A fired worker is paid by the next working day. A worker who quits is paid by the next regular payday or within 7 days, whichever is earlier (DC Code 32-1303). The code section is cited in our notes, but we have no saved official page for it, so read DC Code 32-1303 directly.
• Workers comp has no headcount threshold: every employer covered by the chapter is liable (D.C. Code 32-1503(b)).
• There is no separate city or county tax; DC's income tax is the only one.

District of Columbia employer payroll facts at a glance

Setting up as a DC employer

1. Get a federal EIN from the IRS.
2. Register for withholding with the DC Office of Tax and Revenue (OTR). We could not open the OTR rate page, so take 2026 withholding tables from OTR or your provider.
3. Register with DOES for unemployment insurance. The employer self-service portal is essp.does.dc.gov (found in a search listing; we did not open it).
4. Report new hires and rehires within 20 days to the DC Office of the Attorney General Child Support Services Division.
5. Buy workers comp before anyone starts. Coverage reaches injuries in DC, and injuries outside DC if the job is principally based in DC.

If you also have staff in Maryland or Virginia, the payroll compliance checklist covers what changes when you add a second jurisdiction.

A $50,000 DC employee: what you pay

For a new employer at the 2.7% floor, the leave tax is the largest DC line.

That totals $4,503, 9.01% above salary. Without the secondary-sourced 0.2% assessment it is $4,485. If the prior-year average rate is above 2.7%, your UI line rises with it; the 7.40% top rate would be $666. The calculator covers federal taxes and UI; add Paid Family Leave at 0.75% yourself.

Washington DC payroll services and PEOs

A DC payroll service has to file DC withholding with OTR, UI with DOES and the Paid Family Leave tax, plus Maryland or Virginia returns if you have staff there. That makes multi-state pricing the number to watch. Gusto charges $49 a month plus $6 per person for one jurisdiction on Simple, or $80 plus $12 per person on Plus for multi-state payroll; Patriot adds $12 a month per extra state filing (both checked October 16, 2026). See our payroll software rankings and payroll costs compared.

The District is not a PEO licensing jurisdiction in Harbor Compliance's guide, a secondary source. For bundled benefits, compare the best PEOs and our neighbors' pages for Maryland and Virginia.