How to Do Payroll in Washington: A Step-by-Step Guide for Employers

Last reviewed: July 2026

Washington gets pitched as an easy state to run payroll in, and in one narrow sense that's true: there's no state income tax, so you never touch a state withholding table. But "no income tax" is not the same as "nothing to do." Washington employers still register with two state agencies, withhold two separate payroll premiums that have nothing to do with income tax, and follow their own rules on payday timing and final pay. Here's the order to handle it in.

1. Get Your Federal EIN

Every employer needs a federal Employer Identification Number (EIN) before doing anything else. Apply free at irs.gov, and you'll have the number in about 15 minutes if you apply online. Your EIN is required for federal filings, your Washington business license application, and your ESD registration, so get it before you post a job listing.

2. Register with Washington State

Washington splits employer registration across two agencies, and neither one automatically tells the other you exist.

Department of Revenue business license

Most employers need a Washington business license from the Department of Revenue. This is the general state business registration, and it gets you a UBI number if you don't already have one. Register online through the state's My DOR system before you plan to hire, since processing can take about ten business days.

ESD unemployment insurance account

Once you're ready to pay wages, register with the Washington Employment Security Department (ESD) for your unemployment insurance account. ESD also handles Paid Family & Medical Leave and WA Cares Fund reporting, so this one account covers three of your quarterly obligations. Registration should happen before your first payroll run, not after.

3. No State Income Tax Withholding

Here's the part that genuinely simplifies Washington payroll. There is no state income tax, so there's no state withholding form to collect, no state withholding tables to look up, and no annual state reconciliation to file. When you set up a new employee, the only withholding form that matters for taxes on their wages is the federal W-4. If you're used to running payroll in a state with income tax, this step just disappears in Washington.

That said, don't confuse "no income tax withholding" with "no other withholding." Washington still requires two payroll deductions that catch new employers off guard, covered next.

4. PFML and WA Cares Fund Premiums

Washington funds two statewide benefit programs through payroll premiums, and both run through your ESD account.

Paid Family & Medical Leave (PFML) is a combined employer-and-employee premium that gives workers paid time off for family or medical needs. Employers with fewer than 50 employees don't owe the employer share, but every employer still withholds and remits the employee share. For the full rate breakdown and how the split works, see our Washington PFML guide.

WA Cares Fund is a long-term care insurance premium withheld entirely from employee wages, with no wage cap. Your job as the employer is to withhold it correctly and remit it to ESD each quarter. Details on the rate and how it applies are in our WA Cares Fund guide.

Neither of these is optional, and neither depends on the fact that Washington has no income tax. They're reported alongside SUI on the same quarterly ESD filing.

5. State Unemployment Insurance (SUI)

State Unemployment Insurance is the other major piece of Washington payroll tax, and ESD administers it. New employers are assigned a rate based on their industry, generally 115% of the average rate for that industry, with a floor of 1.00% set by federal law. Once you've been in business long enough to build a claims history, ESD moves you to an experience-based rate.

The 2026 taxable wage base is $78,200 per employee, among the highest in the country. You pay SUI on each employee's wages up to that figure, then stop for the remainder of the year. Reports and payments go through ESD's online system quarterly.

6. Pay Frequency and Final Pay

Washington law requires employers to pay wages on an established regular payday at intervals no longer than monthly. If you use a pay period shorter than a month, your regular payday must fall no later than ten calendar days after the pay period ends. Weekly, biweekly, semi-monthly, and monthly schedules are all allowed as long as you keep to a consistent, published payday.

When employment ends, whether the employee quits, is fired, or is laid off, Washington requires final wages by the end of the established pay period in which the separation occurred. There's no requirement to cut a final check on the spot, but you can't push it past the regular payday for that pay period.

7. Deposit and Filing Calendar

With no state income tax deposits to track, your Washington filing calendar is shorter than most states, but it still has fixed dates.

Full details on federal deposit rules and Form 941 are in our Form 941 guide. Even in a quarter with no wages paid, ESD generally expects a zero report rather than no report at all.

8. Year-End W-2 Filing

At year-end, Washington employers file the same federal forms as everyone else: W-2s to employees and the Social Security Administration, and W-3 transmittals, both due January 31. Because Washington has no state income tax, there's no state withholding box to reconcile on the W-2 and no state annual reconciliation return to file. You'll still want to confirm that PFML and WA Cares wages reported through the year match your actual payroll totals before you close the books.

9. Frequently Asked Questions

Does Washington require state income tax withholding from paychecks?

No. Washington is one of the few states with no state income tax, so there is no state withholding form to collect and no state withholding tables to apply. You still withhold federal income tax based on the employee's federal W-4.

What is the Washington SUI taxable wage base for 2026?

The 2026 taxable wage base is $78,200 per employee, one of the highest in the country. Employers pay state unemployment insurance tax on each employee's wages up to that amount, then stop for the rest of the year.

How often do Washington employers have to pay employees?

State law requires wages on an established regular payday at least once a month. Employers using a pay period shorter than a month must set a payday no later than ten calendar days after the pay period ends.

Do Washington employers still have payroll obligations besides income tax?

Yes. Washington has no income tax, but employers still withhold and remit Paid Family and Medical Leave premiums and WA Cares Fund premiums, register for and pay state unemployment insurance, and cover federal payroll taxes.

Washington Payroll, Handled Remotely

Because Washington has no state income tax, running payroll here is mostly federal filings plus SUI, PFML, and WA Cares reporting to ESD. That's a narrower set of obligations than most states, but it still needs to be done correctly and on time every quarter.

Pacific Data Services has run payroll for small businesses since 1969, and works with Washington employers remotely: EIN and state registrations, SUI calculations, PFML and WA Cares withholding, quarterly ESD filings, and year-end W-2s. You don't need a local office to get it handled correctly.

See how Pacific Data Services handles Washington payroll →