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Updated: February 23, 2023
Washington grows more apples than any other state in the grand ole’ USofA, and you know what they say: an apple a day keeps the doctor away. Even though you might be healthy as a Macoma clam, we have a feeling your payroll tax-cutting duties are giving you a little bit of a headache. While an apple won’t be able to help you calculate payroll taxes, we can. All you need to do is enter wage and W-4 information for each of your go-getting employees and our calculator will take care of the rest.
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).
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.
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.
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.
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.
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 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.
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.
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.