How to Do Payroll in Washington State

Say you are a small business owner in Washington State. You have employees, but don’t know how to pay them on time. What can you do?

The “how to do payroll in excel” is a tutorial on how to do payroll in Washington State. The process of doing this is lengthy, but the end result will be worth it.

Although Washington State does not have state income taxes, it does have a number of payroll-related rules. Hiring minors, for example, requires a particular addendum to your company authorization. Seattle and SeaTac have their own minimum wage rules, which are higher than other states. As a result, onboarding is the most difficult aspect of payroll. It’s quite simple to finish after you’ve set up your employee according to the laws and standards.

While not as complicated as taxes in other places, such as California, Washington State payroll regulations may be complicated. Gusto, for example, is a payroll program that keeps track of all state rules, calculates your rates, and files your federal, state, and local taxes. Gusto may also pay your workers by direct deposit, cheque, or Gusto Wallet, a Washington State-approved mobile-accessible online account. Today is the last day to sign up for a free 30-day trial.

Gusto is a great place to visit.

How to Run Payroll in Washington: A Step-by-Step Guide

It’s not difficult to handle Washington State payroll after you’ve put everything up. The measures for dealing with it in accordance with federal and state rules are outlined below. Consult our page on how to conduct payroll for further information on general payroll methods.

Step 1: Register your company as an employer. You’ll need your Employer Identification Number (EIN) and an account with the Electronic Federal Tax Payment System (EFTPS) at the federal level (EFTPS).

Step 2: Register with the state of Washington. The state will provide you the information you need to open an account when you apply for your company license (or when you renew after employing your first employee). You must first register for a SecureAccess Washington (SAW) account. Then, to your list of SAW services, add EAMS (Employer Account Management System). The Employment Security Department’s website has detailed instructions.

In addition, you’ll need to open a Workers’ Compensation Account (WCA). A state account manager will contact you to set up your policy when you apply for your business license.

Step 3: Create a payroll system. Set up pay runs at least once a month, with extra pay runs for overtime if necessary, and figure out how you’ll pay your staff. Later in the article, you’ll find “Minimum Pay Period” and “Employees Can Be Paid in a Variety of Ways.” Another aspect of your payroll process is deciding how you’ll gather and fill out Forms for Payroll and other papers required for compliance.

Collect employee payroll paperwork in step four. It’s simplest if you do it throughout the onboarding process. W-4, I-9, and a direct deposit permission are among the forms available. Extra forms are not available in Washington.

Collect, evaluate, and approve time sheets in step 5. Washington State is one of the few states that allows employers to pay workers up to ten days beyond the conclusion of a pay month. This not only aids in the calculation of hours, but it also conveys distinct deadlines. For more information, see “Minimum Pay Period” below. You’ll need a mechanism to monitor your hourly or nonexempt workers’ work hours if you have them. Small company owners often write their own time sheets (try using one of our free templates) or utilize time and attendance software, which comes with some free plans.

Step 6: Work out your payroll and pay your staff. Aside from compliance, executing payroll calculations is an important aspect of the payroll processing process. Total the hours worked (use our free timecard calculator for assistance), gross pay, paycheck deductions, tax withholdings, benefit premiums, and so on. Make sure you’re not deducting more than 50% of an employee’s net salary when calculating deductions, particularly garnishments. This phase may be automated with the use of an Excel payroll template or payroll software.

Step 7: Submit payroll tax returns to the federal and state agencies. For federal taxes, follow the IRS’s recommendations (6.2 percent of employee paychecks for Social Security and 1.45 percent for Medicare plus a matching amount from your bank account). Unemployment taxes, both state and federal (6 percent of the first $7,000 of each employee’s income), are also payable. There is no state income tax in Washington.

For Washington unemployment taxes (SUTA), whether or not you owe taxes that quarter, you must submit tax and wage reports every quarter. To submit reports and pay taxes, you may utilize the Employment Account Management System (EAMS) via SAW. You may also submit the report using EAMS and pay through ePay. To avoid fines, make sure you’re using the most recent versions of the Quarterly Unemployment Benefits—Tax Summary (5208A) and Quarterly Unemployment Benefits—Wage Detail (5208B) forms. You must contact the Account Management Center at 855-829-9243 to get the most recent forms. Option 4 should be chosen.

The following dates are the deadlines for filing unemployment tax returns:

Workers’ compensation premiums and reports are due every three months.

Step 8: Keep track of your payroll data. Similar to federal rules, Washington State requires you to preserve employee payroll records for at least three years, with the exception of the federal four-year requirement for payroll tax forms. The following information must be included in the records:

• Name in full
• Address of your residence
• Occupation
• Year of birth (for employees under 18)
• Start date of employment
• When and on what day of the week does an employee’s workweek begin?
• On a daily and monthly basis, the actual hours worked
• Pay scale(s)
• Wages earned in total (including straight time, overtime, piece work units earned, and bonuses)
• Earned tips and service charges
• Wages are increased or deducted.
• For paid sick leave, further documentation is necessary.

For workers under the age of 18, you must maintain supplementary records. In our post on preserving payroll records, we go through the federal obligations in greater detail.

Step 9: Complete your year-end payroll tax returns. W-2 (for workers) and 1099 (for non-employees) are the government forms (for contractors.) These must be obtained by employees and contractors by January 31 of the following year. You must also provide copies of each to the IRS, along with a summary form that totals them all. Additional state-specific year-end paperwork are not required in Washington.

Washington Payroll Laws, Taxes & Regulations

You are still liable for federal income taxes, Social Security, FICA, and Federal Unemployment Taxes, in addition to state regulations. (FUTA). Each employee’s salary is deducted 6.2 percent for Social Security and 1.45 percent for Medicare. These taxes will be paid by both the employer and the employee, with each contributing 7.65% of the total Social Security and Medicare taxes.

Check visit our post on FICA and Unemployment Taxes to learn more about federal obligations. We’ll go through the tax implications in Washington state below.

State of Washington Taxes

There are no local or state income taxes in Washington. This simplifies things, but don’t forget to include in Unemployment Benefits and workers’ compensation.

What if I told you that When tax rates change, Washington automatically recalculates and sends out changes. The most recent mailing took place in February 2021. Have you missed it? For the most up-to-date pricing, log into your EAMS account.

Unemployment Benefits

The SUTA rate in Washington ranges from 0.2 percent to 6.0 percent, not including a social-cost tax rate of no more than 0.5 percent for 2021 and a 0.03 percent employment administration fund tax rate. Taxes are deducted on salaries of up to $56,500. 1.06 percent is the average rate.

You must file Unemployment Benefits on your hourly and salaried employees, including domestic workers earning more than $1,000 in a quarter. Below are general exemptions, but they almost all have specific circumstances. Get the complete list with conditions here.

• Workers who attend school on small farms earning less than $20,000 a year are excluded.
• Practitioners of appraisal
• Barbers, cosmetologists, and massage therapists are all examples of people who work in the beauty industry.
• Workers in the yard
• Salespeople that work outside the company
• Musicians, entertainers, and small-scale performers
• Officers of the corporation
• Aliens who are not citizens of the United States
• Employees from the same family
• Sellers of newspapers
• Services related to travel
• Churches
• Work relief/work education
• In a hospital, patients work.
• In return for financial aid, students or spouses of students labor at the institution.
• Work-study
• Preschool that is not run by the government

The cost of all employment benefits levied to you in the previous four years is divided by your taxable payroll for the same time, yielding 40 UI tax rates. They then add a social-cost rate to the equation. You may use the Washington State UI tax calculator to figure out your overall tax rate.

Insurance for Workers’ Compensation

You must purchase workers’ comp through the Department of Labor & Industries (L&I). This will be set up when you apply for your business license. It’s no-fault insurance, protecting you from lawsuits for a work-related injury or illness. Your rates are based on the risk classification assigned to your business, the base rates for the classification, and the experience factor. The average employer cost is reported to be $1.57 per $100 covered in payroll.

Washington State’s Minimum Wage Laws

The state’s minimum wage is $13.61 per hour, with a possible cost-of-living rise announced every September. The minimum wage does not include tips or service charges. The minimum wage in Seattle is $16.69 per hour, while the minimum wage in SeaTac is $16.57 per hour.

Minimum wage exemptions may be available for the following workers:

• Minors between the ages of 14 and 15 must earn at least 85% of the stipulated minimum wage.
• Jobs that are not subject to the minimum wage legislation

For the following employees, you may apply for a sub-minimum wage certificate:

• On-the-job training is required to pay at least 85% of the statutory minimum salary.
• Certified student employees and students who are learning must be paid at least 75% of the statutory minimum wage.
• Workers with impairments who are certified
• a few apprentices

Overtime Regulations in Washington State

In the News: In November 2020, the Washington Supreme Court ruled that certain agricultural workers are entitled to overtime pay. (In this specific case, dairy farmers.) L&I is analyzing the court decision.

Overtime compensation is 1.5 times the standard hourly rate for employees who work more than 40 hours in a seven-day workweek. Overtime compensation is not something that employees can opt out of. The size of an employer is unrestricted. Exemptions include the following:

• The majority of agricultural workers
• Employees that are genuine executives, administrators, or professionals
• Sales from the outside
• Sellers of newspapers or carriers
• Those who work to conserve forests and prevent fires
• Certain types of child care are available at non-profits.
• Maritime employees
• Ice hockey players between the ages of 16 and 21

Check out the Minimum Wage Act for additional information.

Overtime for Medical Professionals: Medical workers cannot be forced to work for more than 12 hours in a row without the opportunity of at least eight hours of uninterrupted time off:

• RNs
• LPNs
• Surgical technologists are those who work in the medical field.
• Technologists who work in diagnostic radiology
• Specialists in Cardiovascular Invasive Surgery
• Practitioners in Respiratory Care
• Nursing Assistants (CNAs)

This may be waived in the event of an emergency or other unusual scenario.

If you run a major store, food service firm, or full-service restaurant in Seattle, you may be subject to different scheduling and overtime laws. If an employee works both closing and opening shifts and the shifts are within ten hours, they will be paid overtime for the hours worked inside that ten.

Employees Can Be Paid in a Variety of Ways

You may pay employees by cash, paper check, direct deposit, or payroll card, as long as employees are not charged to access their wages. In some cases, meals or room and board can be used as a portion of wages. Learn more on the L&I website.

Pay Stub Regulations

Each payday, you must present workers with a pay stub that includes the following information:

• The wage scale (e.g., hours or days worked, piece-rate basis, or salary)
• Pay scale (or pay scales)
• Wages on the whole
• For that pay period, all deductions
• For paid sick leave, you’ll need all of your records.

Employers in the agricultural industry are subject to stringent pay stub and record-keeping obligations.

Minimum Pay Period

Unless federal law requires a more regular schedule, you must pay workers at least once a month. Employees must be paid within 10 days after the conclusion of a pay period. If you pay monthly, you must pay salaries for hours worked from the first to the 24th of the month at the end of the month. Wages earned after that may be rolled over into the next pay period.

Overtime: If you can’t compute overtime in time to meet the usual payday, you may set up a second payday for overtime compensation. An example of a semiweekly pay period is shown below.

Payroll Deduction Regulations

You are not allowed to withhold more than 50% of an employee’s net income. Follow state law if your federal deductions exceed this amount.

You may deduct federal income taxes, FICA, Unemployment Benefits, child support, union dues, retirement deductions, and other federal or state-mandated withholdings. Tips and gratuities are subject to collection action. Convert housing, rent, and other benefits paid in lieu of wages to dollar amounts and count them as part of net wages.

Child Support: The state sends you a letter withholding child support, and you must respond within 20 days and pay the amount withheld within seven working days of each paycheck.

Laws Regarding Final Paychecks

Final paychecks must be received by the following regularly scheduled payday or before. If workers do not return equipment, keys, uniforms, or other required materials, it cannot be withheld. You may be eligible to deduct money for court-ordered garnishments, payroll advance deductions, or medical, surgical, or hospital treatment. As an employer, you have the option of including severance, personal holidays, or vacation pay in the final paycheck or paying them separately.

Payroll Laws in Different States

When conducting payroll in Washington State, you must be aware of a variety of HR rules.

New Hire Reporting in the State

If you are hiring employees for the first time, you need to refile your business license application with the state. Then the Employment Security Department will get you the information to set up your state unemployment tax account and the L&I will contact you to start your Insurance for Workers’ Compensation account.

You must use the SAW interface to report new workers within 20 days of their employment. Before filling out the form, you may establish an account. You’ll need the employee’s W-4, birth date, and hiring date to file a report.

Requirements for Lunch and Other Breaks

Rest Breaks: Every four hours, employees must take a paid rest break of at least 10 minutes. Youth under the age of 16 are given 10 minutes every two hours, while those aged 16 to 17 are given three hours. This should happen about the middle of the workday, preferably before the third hour. When calculating paid sick leave and overtime, they are included into the hours worked. Employees may be allowed to take 10-minute minibreaks in particular instances. Outside of rest times, you must provide workers appropriate access to bathrooms.

Paid Meal Breaks: You must provide a 30-minute paid meal break to workers who work more than five hours (every four hours for employees under 16). Between the second and fifth hours of the shift, it must begin. If they are on-duty, on-call, or have their break interrupted to return to work, you must pay them during the lunch break. When calculating paid sick leave or overtime, all work done during a lunch break counts as hours worked.

Unpaid Meal Breaks: If the employee has no responsibilities during their meal break, you do not have to pay them or classify their time as labor.

Additional Lunch Breaks: If an employee works more than three hours over their planned shift, they are entitled to a second meal break within five hours of the last meal break. They may opt out of this obligation, but they cannot opt out of rest breaks.

If you have 20 or more workers and any of them are Volunteer Firefighters, Reserve Peace Officers, or Civil Air Patrol members, you must allow them to come late or miss work if they are responding to or returning from an emergency.

Laws Concerning Child Labor

Anyone under the age of 18 is considered a minor in Washington State. To recruit a minor, you must do the following:

• Your business license should include a small work permit endorsement.
• Have the employee’s parent/school or summer authorisation paperwork filled out.
• Check the minor’s age and maintain a copy of the evidence on file.

Certain age groups are restricted from specific jobs. Check the L&I website for a full list. Immediate family members on the family farm are exempted from these restrictions.

Jobs that are suitable for people of diverse ages include:

• Hand-harvesting berries, bulbs, cucumbers, or spinach at the age of 12-13. (may need court permission to work)
• 14–15 years of age: retail, creative, and certain food service occupations, as well as delivery by foot or bike
• Construction, manufacturing, sign-waving, gardening, and various restaurant service employment are available to 16-17 year olds.

The amount of hours permitted is determined on whether or not school is in session and the employee’s age.

14–15 years of age

*Eight hours Saturday and Sunday; **June 1 to Labor Day, 9 p.m.

16 to 17 years of age

***Midnight Friday through Saturday; *Eight hours Friday through Sunday; **Midnight Friday through Saturday or the day before a school holiday;

Time Off

You are not required to pay for holidays, vacations, or bereavement leave in Washington State. Furthermore, any agreements established between you and an employee about such leaves are not enforced. There are various exceptions to the Family Care Act, and some local governments may have their own set of restrictions. When calculating overtime, paid vacations are not taken into account.

For every 40 hours worked, you must provide at least one hour of paid sick leave. You may carry over up to 40 hours into the following accrual year. Paid sick leave may be utilized for a variety of reasons, including mental or physical sickness, injury, or medical treatment. It may also be used to care for family members, if your business, child’s school, or place of care is closed due to illness, or for other qualifying circumstances mentioned in the state’s Domestic Violence Leave Act. Doctors, attorneys, and salaried executives are excluded.

Employees may take up to 12 weeks of paid leave to connect with a newborn or adopted child, cope with a significant health condition, assist a qualified family member with a serious health condition, or attend specified military activities. The Washington Paid Family and Medical Leave webpage has all the information.

Employees may use any kind of paid leave, including paid sick leave, PTO, and personal holidays, to do the following:

• Assist a youngster with a medical problem with therapy or monitoring.
• Care for an eligible family member who is suffering from a severe or life-threatening illness.

However, this leave does not cover the employee’s personal sickness.

An employee may take up to 15 days of job-protected leave if their spouse is summoned to active duty/deployment during a time of armed war. This is true for the military and the National Guard. Leave must be taken prior to or during the deployment and may be a mix of paid PTO and unpaid leave. To be eligible, the employee must work an average of 20 hours per week and must notify you within five days of getting the deployment order.

Domestic abuse, sexual assault, and stalking victims must be given time off work. It may be unpaid leave and is not restricted to available PTO. Time off might be sought for the following reasons:

• Proceedings involving the law, law enforcement, or the courts
• Medical or psychological assistance may be required.
• The assistance of a social service program
• Planning for safety is essential.
• Relocating

Employers must also fulfill requests for safety, such as a job transfer, a change in work phone or email, or the implementation of safety practices, if they do not create undue hardship.

Forms for Payroll

For SUTA, you’ll need a number of federal forms and at least one state form.

W-4 Form for Washington State

There is no state income tax, hence there is no W-4 form. That’s one less thing to be concerned about!

Forms for Washington State Unemployment Taxes

Federal Forms for Payroll

• W-4 Form: Used by businesses to figure out how much tax to withhold from employees’ paychecks.
• W-2 Form: This form is used to report total yearly earnings (one per employee)
• W-3 Form: Reports all workers’ total pay and taxes.
• Form 940: This form is used to report and compute the amount of unemployment taxes owed to the IRS.
• Quarterly income and FICA taxes deducted from paychecks are reported on Form 941.
• Annual income and FICA taxes deducted from paychecks are reported on Form 944.
• Non-employee pay information is included on 1099 forms to assist the IRS in collecting taxes on contract labor.

Payroll Tax Resources/Sources by State

Conclusion

While Washington State does not charge state income tax, you are still responsible for SUTA and paying Insurance for Workers’ Compensation. It has some specific rules on overtime, exemptions to UI, and pay frequency, so be sure you understand the regulations when setting up your payroll. In addition, you’ll need to comply with HR laws, including required break time and sick leave plus nuances for certain groups of employees, like military members.

The “how to prepare payroll” is a process that allows employers to pay their employees. This can be done through direct deposit or by check. The process is the same in Washington State as it is anywhere else.

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