Free Washington payroll tax calculator (and WA tax rates)

Federal payroll taxes for Washington employers

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 use our step-by-step-guide for more detailed explanations.

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 $176,100 for the year. Any wages above $176,100 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 state payroll taxes

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 2025 the wage base is $72,800 up from $68,500 in 2024. Rates also change on a yearly basis, ranging from .27% to 6.02% in 2024. 2025 numbers will be posted when available. These changing rates do not include the social cost tax of 0.5%. New employers use the average experience tax rate of 1% for 2024. We’ll post 2025 numbers when available but tax rates for new employers generally may not be lower than 1% or higher than 5.4%.

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.