Free Washington Payroll Tax Calculator and WA Tax Rates

Federal Payroll Taxes

For starters, here’s a quick rundown on federal payroll taxes. Before you can start the journey of calculating payroll taxes, you first have to figure out how you’re rewarding your employees for their time (i.e. whether you’re paying them hourly, on a salary, or by another method).

• If you’re paying them hourly, multiply their hourly rate by the number of hours worked.
• If you’re paying on a salary, divide the annual salary by the number of pay periods during the year.
• You should also include bonuses, commissions, and tips in here as well. They are all a part of gross wages.

Once you calculate each employee’s gross wages, it’s time to implement withholdings. There are essentially six main steps you need to consider. We summarize each step below, but if you would like to see more detailed explanations, head on over to our handy step-by-step guide.

1. Pre-Tax Withholdings…Such as 401(k) or FSA accounts that are exempt from payroll tax. Deduct these withholdings in order to come up with taxable income.
2. FICA Part 1 – Social Security Tax…Withhold 6.2% of each employee’s taxable income to pay for Social Security Tax, until they’ve earned $160,200 for the year. Any wages above $160,200 are exempt from this tax. As the employer, you also have the pay Social Security Tax. You’ll match the tax that your employees pay dollar-for-dollar.
3. FICA Part 2 – Medicare Tax…Withhold 1.45% of each employee’s taxable income until they’ve earned $200,000 for the year. Then, instead of higher wages being exempt, the tax rate actually goes up. Any wages above $200,000 would pay what’s called an Additional Medicare Tax of 0.9%. As the employer, you’re only responsible for matching the 1.45% Medicare Tax, not the 0.9% Additional Medicare Tax.
4. Federal Income Tax…The biggest tax of them all, which can range from 0% all the way to 37%. We won’t go into all the nitty-gritty details here. You can find all the information you need from the IRS Publication 15-T.
5. FUTA Unemployment Taxes…Your employees sit this one out. Only employers are responsible for paying the FUTA tax. The rate is 6% of the first $7,000 of each employee’s taxable income, which means you won’t pay more than $420 for each employee per year. However, if you pay your FUTA taxes on time and in full each quarter, you can claim a FUTA credit reduction of up to 5.4%. This is a whopping 90% discount, so it’s worth paying attention to your FUTA tax deadlines.
6. Post-Tax Withholdings…If your employees have court-ordered wage garnishments such as child support or any other post-tax deductions, this is the time to do deduct them. You’ll receive notifications from either the IRS or a judge.

Washington (WA) State Payroll Taxes for 2023

Now that we’ve gotten federal taxes out of the way, let’s talk about Washington specific payroll taxes. As you are well aware, there are no state or local income taxes in Washington. However, you still have to factor in Unemployment Insurance and Worker’s Compensation Tax.

Washington State Unemployment Insurance

This varies each year. For 2023, the wage base is $67,600. Rates also change on a yearly basis, ranging from .27 to 6.02% in 2023. These changing rates do not include the social cost tax of 0.7%. New employers use the average experience tax rate of 1% for 2023.

Workers’ Compensation Tax

This is a bit more complicated. Tax is calculated at an hourly rate, and a portion of the taxed amount should be withheld from each employee’s paycheck. It’s your responsibility as the employer to pay the remaining taxable amount. Additionally, the Workers’ Compensation Tax is based upon the difficulty of the job being performed. Visit the Department of Labor & Industries website for a complete list of rates.

Additional Washington State Payroll Tax Resources:

If you want to learn even more about Washington State payroll taxes, we’ve listed what we think are the most useful resources here. Check them out below.

Register as an Employer with the Department of Revenue: (800) 647-7706

Employer Tax Information with the Employment Security Department: (360) 902-9500

Small Business Guide with the Office for Regulatory Innovation and Assistance (ORIA): (800) 917-0043

These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations. 

Now…Write Those Paychecks!

Now that you have a handle on payroll taxes, all you have to do is pass your knowledge along to your employees in the form of a crisp check. Or if your employees prefer, direct deposits are good, too.

Besides making sure your employees get paid correctly and on time, don’t forget to set aside money for paying employer taxes. Those FICA and FUTA payments can add up if you don’t remit them on a regular basis.

Tax filings are due quarterly by filing Form 941. You also need to use Form 940 for 2022 to report your annual FUTA tax. Or if you’d rather pay on an ongoing basis, you can use the EFTPS payment system. You can find all the tax filing deadlines on the IRS website.

More helpful payroll calculators

Though payroll taxes may not be a walk in the park, the calculator at the top of this page is designed to help employers in the state of Washington quickly process their employees’ gross pay, net pay, and deductions (and confidently cut paychecks). However, number crunching sometimes requires a bit more finesse. For instance, if you reward your employees with bonuses, the IRS considers this income and requires taxes to be withheld. Or if an employee leaves for another company, chances are you’ll need to figure out what their final paycheck will be. So, if you need a little more assistance adding up the numbers, try some of the calculators listed below.