How Much Is Payroll Tax in Washington State?

Payroll taxes are mandatory contributions levied on employee wages and employer payrolls, funding various government-sponsored programs. These taxes are typically withheld directly from employee paychecks or paid by employers, supporting initiatives such as Social Security, Medicare, unemployment benefits, and specific state-level programs. Employers and employees both share in the responsibility for these contributions.

Federal Payroll Tax Components

Federal payroll taxes include contributions to Social Security and Medicare, collectively known as Federal Insurance Contributions Act (FICA) taxes, along with the Federal Unemployment Tax Act (FUTA) tax. For 2025, the Social Security tax rate is 6.2% for both employees and employers, totaling 12.4% on wages up to the annual wage base limit of $176,100.

The Medicare tax rate stands at 1.45% for both employees and employers, resulting in a combined rate of 2.9%. Unlike Social Security, there is no wage base limit for Medicare tax. Additionally, an employer must withhold a 0.9% Additional Medicare Tax from employee wages exceeding $200,000 in a calendar year, regardless of filing status. This additional tax is solely an employee responsibility, with no employer match.

FUTA tax is an employer-paid tax designed to fund unemployment benefits. The FUTA tax rate is 6.0% on the first $7,000 of each employee’s wages annually. Employers can receive a credit of up to 5.4% against the FUTA tax for timely payments into their state unemployment funds, effectively reducing the net federal tax rate to 0.6%.

Washington State Unemployment Insurance

Washington State’s Unemployment Insurance (UI) tax is an employer-paid contribution. The specific tax rate for an employer is determined by an experience rating system, which considers their history of unemployment claims.

For 2025, most Washington employers can expect their UI tax rates to fall within a range of 0.19% to 5.4% of each employee’s wages. New employers are typically assigned a rate based on their industry classification, often starting around 2.7%. The taxable wage base for Washington State UI is $72,800 for 2025. The UI tax calculation involves multiplying the assigned tax rate by the employee’s taxable wages, up to this wage base.

Washington State Paid Family and Medical Leave

The Washington State Paid Family and Medical Leave (PFML) program is funded through contributions from both employees and employers. For 2025, the total premium rate for PFML is 0.92% of an employee’s gross wages. This premium is applied up to the Social Security wage base limit, which is $176,100 for 2025.

The total premium is split between employers and employees. Employers with 50 or more employees are responsible for paying 28.48% of the total premium, while employees contribute 71.52%. Employers with fewer than 50 employees are not required to pay the employer portion but must still collect the employee’s share. Contributions are calculated by applying these respective percentages to an employee’s gross wages, up to the annual wage base.

Washington State Long-Term Care

The Washington State Long-Term Care (WA Cares Fund) is a payroll tax that is paid solely by employees. This program aims to provide a public benefit for long-term care services to eligible Washington residents. The current contribution rate for the WA Cares Fund is 0.58% of an employee’s gross wages.

There is no wage base limit for this tax. The amount an employee contributes is directly proportional to their total gross wages. Certain other exemptions may also be available, such as for veterans with a 70% or greater service-connected disability, or individuals living out of state but working in Washington.