Employers have to navigate a variety of regulations and requirements to ensure proper payroll withholding in each US state. This guide serves as an introduction to what employers need to pay and withhold from payroll in the District of Columbia (DC), including unemployment insurance, personal income tax, and workers’ compensation.

Unemployment insurance (UI) in DC

Unemployment insurance (UI) is a federal program overseen by the US Department of Labor, designed to provide temporary financial assistance to individuals who lose their jobs through no fault of their own. As an employer in DC, you are responsible for paying the UI tax.

The UI tax rate varies based on factors such as your business’s history of layoffs and the overall health of the unemployment insurance fund. New employers start at 2.7% or the average rate for the past year, whichever is highest. They pay this for four to five years until the state has accrued enough data about their business to set an individual rate.

You can manage your DC Unemployment Insurance through the online portal provided by the DC Department of Employment Services. For detailed information on paying UI taxes, refer to the resources available on their website.

Personal income tax (PIT) for DC employees

Personal income tax, often referred to as individual income tax or state income tax, is a tax on the income of DC residents. As an employer, you are required to withhold this tax from your employee's wages and remit the amount to the District. The withholding amount is based on the employee's income and the applicable tax rates.

Here are the tax rates for 2025:

Taxable income	Fixed sum + rate
$10,000 or less	4%
$10,000 to $40,000	$400 plus 6% of the excess over $10,000
$40,000 to $60,000	$2,200, plus 6.5% of the excess over $40,000
$60,000 to $250,000	$3,500, plus 8.5% of the excess over $60,000
$250,000 to $500,000	$19,650, plus 9.25% of the excess over $250,000
$500,000 to $1,000,000	$42,775, plus 9.75% of the excess above $500,000
Over $1,000,000	$91,525, plus 10.75% of the excess above $1,000,000

To pay the withheld amount, you can use DC's online portal provided by the Office of Tax and Revenue. Their website offers comprehensive instructions and tables to assist you in understanding and fulfilling your obligations regarding PIT withholding.