Easily manage employment in Washington

Payroll management in Washington

Washington has a strong economy supported by industries such as technology, aerospace, healthcare, and manufacturing. With state-specific payroll regulations, including one of the highest minimum wages in the U.S., no state income tax, and mandatory paid leave laws, employers in Washington must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in Washington

Employers in Washington must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: Washington’s minimum wage is $16.28 per hour, one of the highest in the country.
• Certain cities, such as Seattle ($19.97 per hour) and SeaTac ($19.71 per hour for hospitality and transportation workers), have higher local minimum wages.
• Overtime rules:
• Washington follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• Washington does not impose a state income tax on wages, meaning employers are only responsible for federal income tax withholding.
• However, businesses may be subject to the Washington Business & Occupation (B&O) Tax, depending on revenue and business activities.

Unemployment insurance (UI) tax

• Employers must contribute to Washington’s Unemployment Insurance (UI) program, managed by the Washington Employment Security Department (ESD).
• The UI wage base in Washington is $68,500 (one of the highest in the U.S.).
• UI tax rates vary based on an employer’s experience rating and range from 0.27% to 6.02%.
• New employers typically pay a 0.97% UI tax rate.

Workers’ compensation

• Washington law requires all employers to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Washington is a monopolistic state for workers’ compensation, meaning employers must obtain coverage through the Washington State Department of Labor & Industries (L&I) rather than private insurers.

Paid family and medical leave

• Washington Paid Family and Medical Leave (PFML): Provides employees with up to 12 weeks of partially paid leave for qualifying family and medical reasons.
• Paid Sick Leave: Washington requires employers to provide one hour of paid sick leave for every 40 hours worked.
• Employers must withhold and remit PFML contributions to the Washington Employment Security Department (ESD).

Payroll tax filing and payment deadlines

• Employers must register for a Washington Employer Account with the Washington Department of Revenue and Employment Security Department.
• State unemployment tax reports must be submitted quarterly to the Washington Employment Security Department (ESD).
• Payroll tax payments can be made electronically through the Washington Paid Leave Employer Portal and SecureAccess Washington (SAW).

Quick facts: Important considerations for employers

• State minimum wage compliance: Washington’s state and local minimum wages are among the highest in the nation, and employers must comply with the highest applicable wage law.
• Final paycheck rules:
• If an employee is terminated, employers must provide the final paycheck by the next scheduled payday.
• If an employee resigns, the final paycheck must be provided by the next scheduled payday.
• New hire reporting: Employers must report new hires to the Washington State Support Registry (WSSR) within 20 days.
• Paid sick leave: Washington mandates paid sick leave for all employees, with one hour accrued for every 40 hours worked.
• Payroll recordkeeping: Employers must maintain payroll records for at least three years to comply with state and federal laws.
• Right-to-work state: Washington is not a right-to-work state, meaning employees may be required to join a union if applicable.

Run payroll in Washington with Remote

Managing payroll in Washington requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.