When you’re an employer in Seattle, Washington, you could must know in regards to the JumpStart tax. The tax helps fund providers for Seattle’s low-income inhabitants. Learn on to study extra about Seattle’s JumpStart tax.
What’s the Seattle JumpStart tax?
On July 6, 2020, Seattle’s metropolis council accepted a brand new payroll expense tax for sure companies working in Seattle. The JumpStart Seattle tax took impact on January 1, 2021 and at present has an finish date of December 31, 2040.
Once more, the JumpStart payroll expense tax gives providers to Seattle’s low-income inhabitants. The tax additionally helps replenish Seattle’s Emergency Administration Fund and Income Stabilization Fund.
Who’s answerable for the Seattle payroll expense tax?
The Seattle JumpStart tax is an employer-funded tax. Employers can not make deductions from workers’ compensation for this tax.
So, which employers should pay the tax? It’s essential pay the tax on worker wages in 2024 if in case you have:
- Greater than $8,511,281 in annual payroll bills in 2023 AND
- Not less than one worker with annual compensation of $182,385 or extra in 2024
When you had greater than $8,511,281 in annual payroll bills in 2023, pay the tax on every worker’s wages over $182,385.
The 2024 payroll tax charges vary from 0.746% to 2.557% and are topic to vary yearly. The very best tax solely applies to firms with $1,215,897,244 or extra in payroll bills and solely on worker earnings of $486,359 or extra.
Check out a breakdown of the brand new Seattle payroll tax:
| Enterprise Annual Payroll Bills | Annual Worker Compensation $0 – Much less Than $182,385 | Annual Worker Compensation $182,385 – Much less Than $486,359 | Annual Worker Compensation $486,359 or Extra |
|---|---|---|---|
| Much less Than $121,589,724 | N/A | 0.746% | 1.811% |
| $121,589,724 – Much less Than $1,215,897,244 | N/A | 0.746% | 2.024% |
| $1,215,897,244 or Extra | N/A | 1.492% | 2.557% |
Who’s exempt from the JumpStart Seattle tax?
There are a selection of companies exempt from this new tax. The next do not need to pay into the JumpStart tax:
- Companies with annual compensation of lower than the brink
- An impartial contractor whose compensation is included within the payroll expense of one other enterprise
- Any enterprise engaged in enterprise in Seattle as a grocery enterprise
- Companies which might be preempted from taxation by cities underneath federal or state statutes or rules (e.g., federal, state, and native authorities entities)
For extra details about whether or not it’s essential to pay the brand new tax, try Seattle’s web site.
When is the JumpStart payroll tax due?
Employers should pay the tax on a quarterly foundation.
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This text has been up to date from its unique publication date of January 27, 2021.
This isn’t supposed as authorized recommendation; for extra data, please click on right here.
