Washington State Payroll Tax Guide (2026): Rates, Deadlines, and Employer Obligations

Running payroll for employees in Washington State is more complex than it looks at first glance. The state has no personal income tax, but the simplicity ends there. This guide covers every Washington state payroll withholding obligation employers need to know, with verified 2026 rates sourced directly from state and federal government agencies.

If you manage employees in multiple states, see the complete guide to how US state payroll taxes vary for a full state overview.

How do I manage Washington state withholding taxes for employees?

Washington state has no personal income tax, so there is no state wage withholding for income tax purposes. However, employers must withhold and remit contributions for three separate programs: Paid Family and Medical Leave (1.13% of gross wages in 2026, up to the Social Security cap), WA Cares Fund (0.58% of gross wages, no cap), and workers' compensation (rate per hour worked, based on industry classification). Each program has its own rate, wage base, and filing schedule. SUI is an employer-only tax, employees do not contribute.

See also: Income Tax Rates by State (2026)

Washington SUI: Unemployment insurance rates and taxable wage base for 2026

What is Washington SUI?

Washington's State Unemployment Insurance (SUI) tax is an employer-paid tax that funds temporary financial assistance for workers who lose their jobs through no fault of their own. It is administered by the Washington Employment Security Department (ESD).

How Washington calculates SUI rates

Washington uses an experience-based rating system. An employer's tax rate reflects two components: an experience tax, based on the employer's layoff history over the prior four fiscal years, and a social (shared-cost) tax, based on program-wide costs. Rates are calculated annually and mailed to employers each December by the ESD.

New employers do not have a claims history, so they are assigned a rate based on their industry. According to the Washington Employment Security Department's rate-setting guidance, new employers in 2026 pay 115% of the average rate for all businesses in their industry.

2026 SUI rates at a glance

Employers who are behind on tax payments or quarterly reports may be assigned a delinquent tax rate. To avoid a delinquent rate for the following year, employers must submit all late taxes and reports by September 30.

For a broader comparison of how Washington's rates stack up against other states, see Deel's state-by-state SUI rate guide.

2026 SUI taxable wage base

Beginning in 2026, employers pay unemployment payroll taxes on the first $78,200 paid to each employee — up from $72,800 in 2025. Wages above that threshold are considered excess wages: they must still be reported, but no SUI tax is owed on them.

Washington calculates the taxable wage base annually, based on average wages in the state. According to the ESD's annual wage release, Washington's average annual wage reached $95,160 in 2024, driven by a 7.5% increase in total wages and salaries, which directly drove the higher 2026 taxable wage base.

How to manage and pay Washington SUI

Employers file and pay SUI taxes quarterly through the ESD's online Employer Account Management System (EAMS), accessed via Secure Access Washington (SAW). Employers who are new to Washington must obtain a business license from the Washington State Department of Revenue before filing their first quarterly report.

See also: How Does Unemployment Insurance Work for Employers?

Washington Paid Family and Medical Leave (PFML): 2026 premium rates

What is Washington Paid Family and Medical Leave?

Washington's Paid Family and Medical Leave (PFML) program provides eligible workers with partial wage replacement when they need time away from work for qualifying family or medical reasons, including the birth or adoption of a child, a serious health condition, or caring for a family member with a serious health condition.

The program is funded through premiums shared between employers and employees, collected quarterly through payroll.

2026 PFML premium rate

Starting January 1, 2026, the PFML premium rate is 1.13% of each employee's gross wages, not including tips. The 2025 rate was 0.92%, an increase of approximately 23%. The Washington Employment Security Department announced the 2026 rate in October 2025.

Premiums apply to wages up to the Social Security wage cap. The Social Security cap for the 2026 calendar year is $184,500. Employers must begin withholding the updated rate from wages paid on or after January 1, 2026. You cannot retroactively withhold premiums from employees.

How the 2026 premium is split between employers and employees

Per the Washington State Paid Family and Medical Leave employer guidance, all employers—regardless of size—must either withhold the employee premium from each worker's paycheck or pay it on their behalf, then remit to the state quarterly. First-quarter premiums using the 2026 rate are due by the end of April 2026.

Why the PFML rate increased

The ESD recalculates the PFML premium rate each October based on program usage and premiums collected the prior year. More than 218,000 individuals claimed Paid Leave benefits in 2025 alone, totaling more than $1.76 billion, which is a significant increase over the 175,000 claimants and $1.35 billion paid during the same period of 2024. That growth in claims directly drove the higher 2026 premium.

PFML 2026: What else changed

Beyond the premium rate increase, Washington's PFML program introduced several other changes effective in 2026:

• Expanded job protections: Broadened criteria for employees eligible for job-protected leave, extending requirements to employers with 25 or more employees for the 2026 calendar year
• Clarified health care benefit requirements: Employers must continue health insurance coverage during approved leave in certain situations
• Small business assistance grants: The grant program helping small employers with costs related to employees on leave has been expanded

For a full breakdown of how Washington's PFML compares to other state paid leave programs, see the State-by-State Guide to Maternity Leave in the United States.

WA Cares Fund: Long-term care payroll tax in 2026

What is the WA Cares Fund?

The WA Cares Fund is the nation's first mandatory, publicly funded long-term care insurance program for workers. It provides eligible Washingtonians with a lifetime benefit of up to $36,500 (adjusted annually for inflation) to help cover long-term care services such as in-home aides or assisted living.

The WA Cares Fund is funded entirely by worker premiums. The premium rate is set by state law at 0.58% of gross wages with no cap on the wages subject to the tax. Premium collection began July 1, 2023. Benefits became available starting July 2026 for eligible workers who have contributed to the fund.

Employer obligations for WA Cares

Employers do not contribute to the WA Cares Fund directly. However, all employers must:

1. Withhold the 0.58% premium from every eligible Washington employee's gross wages, or pay it on their behalf
2. Remit premiums to the ESD quarterly, alongside PFML reporting—the two reporting systems are combined, so employers report for both programs at the same time
3. Track and retain records of any employee exemptions

Employee exemptions

Some employees are exempt from WA Cares premiums. Key exemption categories include:

• Employees who purchased qualifying private long-term care insurance before November 1, 2021, and received an approved exemption by December 31, 2022. These employees have a limited one-time window to rejoin the program voluntarily until June 30, 2028
• Employees whose primary residence is outside Washington
• Spouses or domestic partners of active-duty military members
• Employees holding non-immigrant visas for temporary workers—automatically exempt effective January 1, 2026, unless they notify the ESD that they wish to participate

Employees are responsible for notifying their employer of an approved exemption. Employers must retain exemption records. As the WA Cares Fund FAQ confirms, the premium rate is capped by law at 0.58% and can only be raised by the state legislature.

WA Cares 2026: New developments

Washington's SB 5291, signed in May 2025, introduced the most significant changes to WA Cares since the program launched. Effective January 1, 2026, the amendments:

• Expand eligibility through three contribution pathways, not just the standard 10-year vesting path
• Allow previously exempt employees a one-time opportunity to rejoin the program voluntarily until June 30, 2028
• Permit out-of-state workers who have contributed for at least three qualifying years to continue WA Cares coverage after moving out of Washington (effective July 2026)
• Establish a framework for supplemental private long-term care insurance, with rules effective May 1, 2026

Washington workers' compensation: 2026 rates and how premiums work

What makes Washington workers' compensation unique

Washington requires all employers to provide workers' compensation coverage for employees. Unlike every other state, Washington does not allow private insurance carriers to provide workers' compensation coverage. Employers must purchase coverage directly from the state through the Washington State Department of Labor & Industries (L&I).

Washington also differs from other states in how it calculates premiums. Rather than charging a percentage of payroll, Washington bases workers' compensation premiums on hours worked. When wages go up, the rate per hour stays the same, so payroll growth alone does not automatically increase your workers' compensation costs.

2026 workers' compensation rates

The Washington State Department of Labor & Industries adopted a 4.9% average increase in the hourly rate employers and workers pay for workers' compensation in 2026. With this increase, the average rate per $100 of payroll in 2026 is $1.50 before retro refunds, which is about what it was in 2022.

As of January 1, 2026, employers and workers together pay, on average, $1.37 more per week for each full-time position. Employers pay about 75% of the premium; workers pay about 25%. The 4.9% figure is an overall average. Individual employers may see higher or lower rate changes depending on their industry risk classification and recent claims history.

How the workers' compensation premium is structured

Workers' compensation premiums in Washington are made up of four components:

1. Accident rate — covers wage replacement benefits and disability awards
2. Medical aid rate — covers medical care and vocational services
3. Supplemental pension rate — covers cost-of-living adjustments for long-term time-loss and pension recipients
4. Stay at Work rate — funds employer incentives to keep injured workers on light-duty assignments while they recover

Workers and employers each contribute half of the medical aid, Stay at Work, and supplemental pension premiums. Employers pay all accident fund premiums. Employers register for a workers' compensation account through L&I, and your specific rate is tied to your industry's risk classification (RCW 296-17).

See also: 2026 Payroll Compliance Checklist and Tax Law Guide

Business and Occupation (B&O) tax

What is Washington B&O tax?

Washington's Business and Occupation (B&O) tax applies to the gross receipts of a business, not net income. It applies regardless of whether a business is profitable. The rate varies based on the type of business activity, and certain businesses engaged in retail sales or services must also collect and remit retail sales tax.

B&O tax is not a payroll tax in the traditional sense—it is not deducted from employee wages—but it is a state tax obligation for businesses operating in Washington that affects overall cost modeling. For current B&O tax rates and classifications, refer directly to the Washington State Department of Revenue.

Payroll tax filing deadlines in Washington

Quarterly filing requirements

All Washington employers must file a quarterly tax-and-wage report covering unemployment insurance. The same quarterly report cycle applies to PFML and WA Cares premiums, which are filed together through the ESD's EAMS portal.

If a due date falls on a weekend or holiday, the deadline moves to the next business day.

Monthly filing

Employers required to file monthly unemployment tax returns must submit by the 25th of the following month.

Annual filing

Annual returns are due April 15 of the following year.

What to include in the quarterly tax-and-wage report

Per the ESD employer guide, the report must cover all employees subject to unemployment insurance, including corporate officers and domestic service workers earning more than $1,000 per quarter. Required fields for each employee:

• Full name
• Social Security Number
• Gross wages
• Hours worked (rounded to the nearest whole number)
• Standard Occupational Classification (SOC) code

Penalties for late filing or payment

Failure to file on time or pay taxes owed results in penalties and interest. Employers who cannot pay in full can contact the ESD Collections Unit at [email protected] or 866-697-4831 to request a deferred payment plan. Approved payment plans can help employers avoid the higher delinquent tax rate for the following year.

See also: How US Companies Handle Payroll When Remote Employees Work in a Different State

How to manage Washington state withholding taxes for employees

Managing Washington payroll means tracking multiple programs, each with distinct rates, wage bases, and filing requirements. Here's a practical summary of what to do and when:

Step 1: Register your business

New employers must obtain a business license from the Washington Department of Revenue before filing the first quarterly tax-and-wage report.

Step 2: Determine your SUI rate

New employers are assigned a rate based on industry. Experienced employers receive their rate letter from the ESD each December.

Step 3: Set up PFML and WA Cares withholding

Withhold 71.43% of the PFML premium (1.13% total rate in 2026) from each eligible employee's gross wages, up to the $184,500 Social Security cap. Separately, withhold 0.58% of gross wages (no cap) for WA Cares. Collect exemption letters from any exempt employees before the first payroll of the year.

Step 4: Register with L&I for workers' compensation

Obtain a workers' compensation account with the Washington State Department of Labor & Industries. Premiums are based on risk classification and hours worked.

Step 5: File and pay quarterly

Submit tax-and-wage reports through ESD's EAMS portal. Workers' compensation reports and payments go through L&I. Missing deadlines triggers penalties.

Step 6: Update rates annually

Washington updates SUI rates, PFML premiums, and workers' compensation rates every year. Watch for rate notices in October (PFML), November/December (SUI and workers' compensation), and update your payroll system before January 1.

For employers managing teams across multiple states, see Deel's guide on how to register and manage multi-state payroll taxes.

Manage Washington payroll compliance with Deel

Washington's payroll compliance is more demanding than most states, with five separate programs, five sets of rates, and filing deadlines that don't always align. When any rate changes, every employer must update their payroll system before the new year begins.

Deel Payroll handles all of it automatically. Deel's owned payroll infrastructure continuously monitors regulatory changes across all 50 states, applies updated contribution rates, and keeps your filings on track. When a new rate takes effect in Washington, Deel updates it for you.

That's what we mean by continuous compliance: Not a one-time audit, but an always-on system that keeps your Washington obligations accurate, every pay period.

Talk to a Deel expert to see how Deel Payroll handles Washington state compliance for your team.