What payroll deductions are employers required to withhold?

Payroll Tax Deductions Required for Employers in Washington

Employers operating in Washington state must withhold specific payroll deductions from employee wages to comply with federal and state regulations. These deductions ensure proper tax reporting and funding for social programs.

Mandatory Payroll Deductions

• Federal Income Tax: Employers must withhold federal income tax based on the employee's W-4 form and IRS tax tables.
• Social Security Tax: Withhold 6.2% of the employee’s wages up to the annual wage base limit for Social Security.
• Medicare Tax: Withhold 1.45% on all wages, with an additional 0.9% Medicare surtax on wages exceeding $200,000 for single filers.
• Washington State Paid Family and Medical Leave (PFML) Premium: Employers must withhold the employee portion of PFML premiums, which is currently 63% of the total premium. The total premium rate is set annually by the Washington Employment Security Department.
• Local Taxes: Washington does not impose state income tax or local income taxes, so no withholding is required for these.

Additional Operational Considerations

• Unemployment Insurance (UI): Employers pay UI taxes but do not withhold these from employee wages.
• Recordkeeping and Reporting: Maintain accurate payroll records of all withheld amounts and report to the IRS and Washington state agencies as required.
• Employee Classification: Ensure proper classification of workers (employee vs. independent contractor) to determine withholding obligations.
• Automation: Use payroll software or services to automate withholding calculations and compliance with changing rates.

As of 2026, employers should verify the current PFML premium rates and federal tax tables annually to maintain compliance.