The payroll expense tax is in addition to the City of Seattle's fees for business license tax certificates and both the Washington State and City of Seattle B & O tax. Washington, unlike many other states, does not have an income tax. Washington’s B&O tax is calculated on the gross income from activities. However, new employers are charged according to the average industry rate ranging between 1% and 5.4%. Premiums for contracts authorized by the Washington State Health Care Authority (HCA) (Chapters 41.04 and 41.05 RCW). The B&O tax rate … Taxable employers in the highest rate class pay 5.7 percent (not counting delinquency or Employment Administration Fund taxes). A payroll tax will pay for it. Q. What is the B&O tax rate? The Washington income tax has one tax bracket, with a maximum marginal income tax of 0.00% as of 2021. You can try it free for 30 days, with no obligation and no credt card needed. Court-ordered wage garnishments Deductions that benefit the employee, when the worker has agreed to the deductions in advance. Deductions required by state or federal law, such as federal income taxes, Medicare, workers’ compensation, etc. Starting in 2025, eligible state residents in Washington State will get $100 per day for 365 days of long-term care costs. And on top of your payroll responsibilities, you might also need to get workers’ compensation coverage. However, it does require the employers to pay Washington State Unemployment Insurance (SUI) tax, at the rate ranging 0.13% to 5.72% on a first $52,700 earned in wages by each employee in a year. Tax Rates The tax rates are based on the amount of the business' annual Seattle-based payroll expense and the amount of annual employee compensation of at least $150,000. Under the current version of the statewide payroll tax bill, about 7,000 businesses across the state would pay the tax directly. Washington state employers needing to get workers’ compensation must learn about Washington Labor and Industries regulations, exemptions, and rates. Detailed Washington state income tax rates and brackets are available on this page. If you’re an employer, you are responsible for handling payroll taxes for your employees. This means there are no deductions from the B&O tax for labor, materials, taxes, or other costs of doing business. Washington State Payroll Tax and Registration Guide Updated September 30, 2020--For Administrators and Employees (Employers who are delinquent in paying their taxes may have to pay an additional 2 percent delinquency tax.) The average rate in 2018 is estimated to be 1.10 percent – compared to 1.21 percent in 2017. If you want to simplify payroll tax calculations, you can download ezPaycheck payroll software, which can calculate federal tax, state tax, Medicare tax, Social Security Tax and other taxes for you automatically. 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