Washington payroll taxes for employers (2026)
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Washington's Employment Security Department (ESD) taxes the first $78,200 of each employee's wages for unemployment in 2026, the highest of any state in our 2026 data, and it assigns new employers their industry's average rate instead of one flat new employer rate; Washington has no state income tax (checked October 16, 2026). Instead of income tax, Washington runs three other programs through payroll: Paid Family and Medical Leave, the WA Cares long-term care premium and workers comp bought only from the state.
- SUTA wage base
- $78,200
- New employer SUTA rate
- Industry average rate (no flat rate)
- State income tax
- No
- Minimum wage
- $17.13
On this page
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
| Item | Washington rule or rate | Official source |
|---|---|---|
| SUTA taxable wage base (2026) | $78,200 | source ; source |
| New employer SUTA rate | Industry average rate (no flat rate) | source ; source |
| SUTA rate range | 0.00% (DOL sigpros, experience portion) to 5.40% (DOL sigpros, experience portion) | |
| 2027 rates published? | no (base usually announced in June) | |
| Unemployment agency | Employment Security Department (ESD) | source |
| State income tax withholding | No. No state income tax on wages | |
| Paid leave or disability programs | Paid Family and Medical Leave: 1.13% total, employer 28.57% / employee 71.43%; employers under 50 employees exempt from employer share; cap $184,500 (2026). WA Cares Fund (long-term care): employee 0.58%, no cap, ESD-approved exemptions. 2027 PFML rate not found yet | source ; source |
| Minimum wage 2026 | $17.13 | source ; source |
| Tipped cash wage 2026 | $17.13 (no tip credit) | |
| Minimum wage 2027 | $17.73 effective Jan 1 2027 ($15.07 for ages 14-15) | |
| New hire reporting | Within 20 days of hiring | source |
| Pay frequency rule | At least monthly (DOL payday table) | |
| Final paycheck rule | Fired or quit: at the end of the established pay period (RCW 49.48.010(2)); exceptions for union contracts and certain shared industry payment plans | source |
| Workers comp required | Monopolistic state fund: yes (L&I; self-insurance possible). All employments in the state are covered (RCW 51.12.010) with no headcount threshold, except the exclusions in RCW 51.12.020 (for example private-home domestic servants where fewer than two work 40+ hours a week, sole proprietors and partners, certain corporate officers and LLC members, some musicians, newspaper carriers, booth renters) | source |
| PEO license or registration | No standalone PEO license. PEO and each client register with ESD; PEO files client reports within 30 days of each new or ended client plus quarterly reports (RCW 50.12.300) |
Checked October 16, 2026 against the official sources linked in each row.
Registering as an employer in Washington
- Get an EIN from the IRS.
- 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.
- Open an L&I workers comp account before work starts.
- Report new and rehired employees to ESD within 20 days of hire.
- 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.
| Employer cost | Rate | Per year |
|---|---|---|
| US Social Security | 6.2% of gross pay | $3,100.00 |
| US Medicare | 1.45% of gross pay | $725.00 |
| US FUTA | 0.6% up to $7,000 | $42.00 |
| Washington unemployment tax (new employer) | Your industry average rate x $50,000 (all of it is under the $78,200 base) | $500 per percentage point |
| Paid Family and Medical Leave, employer share | 28.57% of 1.13% of $50,000; only employers with 50+ employees | $161.42 |
| L&I workers comp | Premium by hours worked and risk class | Varies |
| Fixed lines before SUTA and L&I | Under 50 employees / 50 or more | $3,867.00 / $4,028.42 |
Source: Washington ESD tax handbook and PFML release; IRS Topics 751 and 759. Checked Oct 2026. ESD assigns new employers their industry's average rate instead of one flat rate.
Take the rate from your ESD notice and multiply it by $500 for each point. The employee side carries the leave and care premiums:
| Deduction | Rate | Per year |
|---|---|---|
| Paid Family and Medical Leave, employee share | 71.43% of 1.13% of wages, up to $184,500 | $403.58 |
| WA Cares Fund (long-term care) | 0.58% of all wages, no cap | $290.00 |
Source: Washington ESD; WA Cares Fund. Checked Oct 2026. Employees with an ESD-approved WA Cares exemption pay nothing for that line.
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.
Frequently asked questions
What is the Washington unemployment tax rate for new employers in 2026?
What is the Washington PFML rate for 2026?
How much is the WA Cares deduction?
Does Washington have a state income tax on wages?
Can I buy workers comp from a private insurer in Washington?
Sources (16)
- Washington ESD: 2026 taxable wage base release (checked Oct 16, 2026)
- Washington ESD: Employer tax handbook (checked Oct 16, 2026)
- Washington ESD: 2026 Paid Family and Medical Leave premium release (checked Oct 16, 2026)
- WA Cares Fund: Premium information (checked Oct 16, 2026)
- Washington Business Licensing Service: Hiring employees (checked Oct 16, 2026)
- Washington ESD: Reporting new and rehired employees (checked Oct 16, 2026)
- Washington ESD: Professional employer organizations (checked Oct 16, 2026)
- Washington Legislature: RCW 51.12.020 (workers comp exclusions) (checked Oct 16, 2026)
- Washington L&I: Rates per hour worked for State Fund firms (2024 table, older than 12 months; used only for the hourly basis) (search result checked Oct 17, 2026)
- Washington L&I: File quarterly reports (out-of-state supplemental reporting) (search result checked Oct 17, 2026)
- Washington Legislature: RCW 49.48.010 (final wages) (checked Oct 16, 2026)
- Washington L&I: Minimum wage (checked Oct 16, 2026)
- Gusto: Gusto pricing page (checked Oct 16, 2026)
- IRS: Topic 751: Social Security and Medicare withholding rates (checked Oct 16, 2026)
- IRS: Topic 759: Form 940, FUTA tax (checked Oct 16, 2026)
- Social Security Administration: 2026 COLA fact sheet (wage base $184,500) (checked Oct 16, 2026)
This page is general information, not tax, legal or accounting advice. Rules and rates change, so check the official source linked above before you file or sign a contract. Read our disclaimer.