Washington Payroll Calculator

Washington Tax Law Citations (2026)

Washington State imposes no individual income tax on wages or salary — the Washington State Constitution (Article VII, § 1) was historically interpreted to prohibit graduated income taxes on "property," and although the Washington Supreme Court in Quinn v. State (2023) upheld the capital gains tax as an excise tax, no W-2 wage tax exists in 2026. The relevant taxes that do appear on Washington paychecks are governed by other titles. Capital gains tax derives from RCW 82.87 ("Capital Gains Tax"); Paid Family and Medical Leave from RCW 50A; the WA Cares long-term care tax from RCW 50B.04; and unemployment insurance from RCW 50. The Washington Department of Revenue ("DOR") portal: dor.wa.gov; Employment Security Department (ESD) portal: esd.wa.gov.

2026 capital gains tax brackets. Per Senate Bill 5813 (2025), Washington adopted tiered rates effective retroactively to January 1, 2025 and continuing in 2026: a $278,000 standard deduction (indexed; 2025 figure), 7% on long-term capital gains above the deduction up to $1 million, and 9.9% on gains above $1 million. The tax applies only to long-term gains over the threshold from sale of stocks, bonds, and certain business assets — real estate sales, retirement accounts, and most small-business sales remain exempt under RCW 82.87.050.

Recent legislation (2024–2026). The most consequential 2026 development for Washington payroll is the delayed activation of the WA Cares Fund (RCW 50B.04), which finally began collections on July 1, 2023 after multiple legislative delays; SB 6072 (2024) further refined opt-out rules. SB 5813 (2025) introduced the tiered capital gains structure. Washington remains one of nine states with no W-2 wage income tax; payroll calculations therefore focus on FICA, FUTA, SUI, PFML, and WA Cares.

Washington 2026 Payroll-Specific Numbers

• State Unemployment Insurance (SUI): Per RCW 50.29 and ESD's 2026 tax tables, experience-rated employer rates range 0.27% to 6.02% (Tax Schedule "B" effective 2026) on the first $72,800 of wages per employee — one of the highest UI taxable wage bases in the country. New non-construction employers pay roughly 1.10%; new construction employers pay approximately 5.45%.
• WA Cares (Long-Term Services and Supports): Mandatory under RCW 50B.04 since July 1, 2023. Rate: 0.58% on all wages with NO income cap — this is unusually punitive for high-income W-2 earners. Employees who held qualifying private long-term care insurance before November 1, 2021 may have opted out permanently; otherwise the contribution is mandatory.
• Paid Family and Medical Leave (PFML): Per RCW 50A. The 2026 total premium is approximately 0.92% of eligible wages up to the SSA wage base ($176,100). Employees pay 71.43% of the medical-leave portion plus 100% of the family-leave portion; employers with 50+ employees cover the rest.
• Workers' Compensation: Washington uniquely operates a monopoly state fund (Department of Labor & Industries, "L&I") under RCW Title 51 — private workers' comp insurance is generally not permitted. L&I rates are class-code specific and partially passed through to employees as an "Employee Hours Rate" deduction (typically a few cents per hour, varying by class code).

Washington BLS Wage Data (May 2024 OEWS)

Washington consistently ranks in the top five states for median wages. Per the BLS OEWS program, Washington's statewide median annual wage was approximately $63,180 in May 2024 — reflecting the heavy presence of Amazon, Microsoft, Boeing, Costco, and Starbucks corporate workforces. Source: bls.gov/oes/current/oes_wa.htm. Seattle-Tacoma-Bellevue MSA median wages reach $74,200, while non-metropolitan Washington registers approximately $48,900. Top occupations include software developers (~$176,500), aerospace engineers (~$132,400), and registered nurses (~$108,300).

Practitioner Insight: What Sets Washington Apart

What sets Washington apart for payroll calculations is the combination of "no income tax" headline with several uncapped or high-cap payroll deductions. The 0.58% WA Cares premium has no Social Security wage cap, so a $500,000 software engineer pays $2,900 per year — not the $1,021 a $176,100 cap would suggest. PFML and SUI both ride the SSA wage base, but Washington's $72,800 SUI base is the second-highest in the U.S. (after New Mexico), inflating employer cost per FTE. Additionally, the L&I monopoly workers' comp model means employers cannot shop coverage; rates can only be optimized through experience modification and Retro program participation. Washington's tiered capital gains tax is not a payroll item but does affect compensation planning for executives with substantial RSU/ISO portfolios — the 9.9% rate above $1M is competitive with the highest-bracket states despite Washington's wage-tax-free reputation.

Editor's Note

Last reviewed by Mustafa Bilgic on 2026-05-05. Washington state tax law verified against the Washington Department of Revenue (dor.wa.gov), Employment Security Department (esd.wa.gov), the WA Cares Fund portal (wacaresfund.wa.gov), and IRS Publication 15-T (2026 edition). Mustafa Bilgic is the sole proprietor of PayrollCalculator.us, registered at Malazgirt No: 225, 02000 Adıyaman, Türkiye.

Citations & Official Sources

1. RCW 82.87 Capital Gains Tax — app.leg.wa.gov/RCW/default.aspx?cite=82.87
2. RCW 50A Paid Family and Medical Leave — app.leg.wa.gov/RCW/default.aspx?cite=50A
3. RCW 50B.04 WA Cares (Long-Term Services and Supports) — app.leg.wa.gov/RCW/default.aspx?cite=50B.04
4. WA Cares Fund — wacaresfund.wa.gov
5. Washington Employment Security Department, UI Tax Information — esd.wa.gov/employer-taxes
6. U.S. Bureau of Labor Statistics, Washington OEWS May 2024 — bls.gov/oes/current/oes_wa.htm
7. IRS Publication 15-T (2026) — irs.gov/pub/irs-pdf/p15t.pdf