Seattle Payroll Expense tax updated
Effective 1 January 2022, the Seattle Payroll Expense tax rate thresholds have changed:
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- The $150,000 employee annual compensation threshold increases to $158,282.
- The $400,000 employee annual compensation threshold increases to $422,085.
- The $100,000,000 employer payroll expense threshold increases to $105,521,339.
- The $1,000,000,000 employer payroll expense threshold increases to $1,055,213,392.
The Seattle Payroll Expense tax annual employer payroll threshold increased from $7 million to $7,386,494.
https://www.seattle.gov/license-and-tax-administration/business-license-tax/other-seattle-taxes/payroll-expensetax#willthetaxthresholdschange
Washington Employment Administrative Fund (EAF) updated
Effective 1 January 2022, the Washington Employment Administrative Fund (EAF) tax wage base increased from $56,500 to $62,500. This was confirmed with the Washington Employment Security Department (ESD).
Washington Paid Family & Medical Leave updated
Effective 1 January 2022, the Washington Paid Family & Medical Leave (PFML) wage base increased to $147,000 and the total premium percentage increased to 0.6% from 0.4%. The split between employee and employer shares for this tax has also been updated to 26.78% for employers and 73.22% for employees.
Therefore, the Washington PFML employer (53-000-0000-ER_FLI-000) tax rate increased from 0.146668% to 0.16068% and the employee (53-000-0000-FLI-000) tax rate increased from 0.25332% to 0.43932%.
https://paidleave.wa.gov/employer-roles-responsibilities/
Washington State Unemployment Tax updated
Effective 1 January 2022, the Washington State Unemployment Tax wage base increased from $56,500 to $62,500. This was confirmed with the Washington Employment Security Department (ESD).
Legislation Updates 2022
Employer Industrial Insurance will return $0 withholding instead of not at all
In the STE, if you set up the Employee Industrial Insurance without both an overrideRate set and the TOTAL_HOURS miscellaneous parameter set, the tax is still calculated and returned, just with $0 withheld.
On the other hand, Employer Industrial Insurance would previously not return the tax at all in this case.
For consistency, the Employer Industrial Insurance has now been updated to function the same as the employee tax; it will return $0 withheld even if both overrideRate and TOTAL_HOURS have not been properly set.
This should only affect your system if you have tests checking for the Employer Industrial Insurance to not be returned if it was set up incorrectly, as it will now return with $0 withheld instead. No calculations have changed for when it has been setup correctly.
PFML employer tax limit and rates corrected
For the 2019 tax year, the tax limit was reported as $194.92 and the rate was reported as 0.14667%. The limit has been corrected to $194.94 and the tax rate has been corrected to 0.14668%.
For the 2021 tax year, the tax limit was reported as $209.44 and the rate was reported as 0.14667%. The limit has been corrected to $209.46 and the tax rate has been corrected to 0.14668%.
This error was introduced in the 2021-R10 release and is now corrected to match the premium calculation:
https://paidleave.wa.gov/estimate-your-paid-leave-payments/
Any unit tests you have created around WA PFML since 2021-R10 may be affected.