Your Ultimate Guide to Oregon Payroll

Employers are responsible for various aspects of the business, from hiring and registering employees to benefits and payroll. Some of these factors are governed by regulations and requirements stipulated by the state.

If you’re an employer in Oregon, then this guide serves as a useful introduction to payroll withholding in the state, touching on unemployment insurance, personal income tax, and workers’ compensation.

Paying unemployment insurance (UI) in Oregon

Oregon’s Employment Department administers UI to provide temporary financial relief to individuals who are unemployed through no fault of their own.

Employers are responsible for making contributions to the fund, which can be managed online through Oregon state’s Frances online portal.

For more information on paying your unemployment insurance, you can also consult the Oregon Department of Revenue.

Oregon state unemployment insurance (SUI) tax rates

In Oregon, unemployment insurance tax rates are determined annually based on the employer's experience rating and other economic factors. Employers can access their specific tax rates on their account through the Frances online portal.

UI rates range from 0% to 5.4% with a fixed rate of 2.4% for new employers. The taxable wage base is $54,300.

Withholding personal income tax from your Oregon employee

Personal income tax is deducted from the employee’s wages and withheld by the employer. Also known as individual income tax or state income tax, the tax is charged on the income of Oregon residents.

You must register for a business identification number (BIN) before you hire employees and run your first payroll. Oregon has a dedicated online portal for registration.

After withholding the tax from your employee, you’re responsible for paying the amount withheld to the state, which can be made through the Oregon online payment portal.

More information on paying personal income tax can be found in the Oregon Department of Revenue.

State withholding tax rates in Oregon

Oregon uses a progressive tax rate system. Employers must use the state's tax withholding tables to calculate the appropriate withholding amount for each employee, based on their income level.

If employees have a base income of less than $50,000 per year, you use the following table:

If employees have a base income of $50,000 or more per year, you use this table instead:

Before calculating the rate, you must deduct each employee’s federal income tax from their base income. There are set limits for employees with annual wages over $50,000 per year.

Employers can manage these tax payments using the Frances Online portal, ensuring timely and accurate remittance.

Withholding statewide transit tax from your Oregon employee

Statewide transit tax is another tax requirement in Oregon, and the funds go into the Statewide Transportation Improvement Fund to finance investments and improvements in public transportation services.

The 0.01% tax is deducted from the employee’s wages and is withheld by the employer, who is responsible for paying the amount withheld to the state. You can pay the withheld amount through the Frances Online portal or as part of Form OQ.

Paying and withholding workers’ benefit fund assessment from your Oregon employee

The workers’ benefit fund (WBF) assessment funds return-to-work programs and provides increased benefits over time for workers who are permanently and completely disabled. The benefits can also be paid to families of workers who die from workplace injuries or diseases.

WBF is two cents an hour in 2025. The employer must withhold half the total amount from employee wages and match it with their own funds.

After you withhold the tax from your employee, you are responsible for paying the amount to Frances Online.

Paying and withholding paid family leave from your Oregon employee

Paid Leave Oregon is a state-run program that allows employees to take time off for medical reasons. It covers illnesses, injuries, and pregnancy-related conditions as well as safety leave during and after traumatic incidents. Employees can also use paid leave to care for immediate family members.

The rate for 2025 is 1% of gross wages up to $176,100. Employers are responsible for up to 60% of the amount depending on their workforce size. They must use Frances Online to file and remit contributions.

Paying your Oregon Workers’ Compensation

On top of paying your Oregon payroll taxes, you will also need to pay for workers’ compensation in the state, even if you only have one Oregon employee.

Workers’ compensation is insurance for an employee’s injury while performing their job, typically purchased from a qualified commercial carrier in the state. Oregon provides helpful information to help you find a qualified commercial carrier. 

Make sure that you verify that your workers’ compensation insurance is compliant with the state’s regulations.

Payroll tax due dates in Oregon

Employers must adhere to payroll tax due dates to remain compliant and avoid penalties. Oregon has specific deadlines for filing different types of taxes:

• Withholding taxes are due at the same time as federal income taxes
• UI, WBF, and transit tax are due on the last day of the month following the end of the calendar quarter
• Form OQ reports are due April 30th, July 31st, October 31st, and January 31st

Annual reconciliation

You must file an annual reconciliation by January 31st of the following year with Form WR. If you stop operating before the end of the year, you must file within 30 days of your final payroll.

Submission process for payroll taxes in Oregon

Employers are required to file payroll tax forms electronically using Oregon’s Frances Online system. These systems ensure efficient and accurate filing. Employers should use forms such as OR-WR (Annual Reconciliation) and other relevant forms for quarterly filings.

Oregon tax portals allow employers to register, file, and pay their payroll taxes electronically, supporting efficient and accurate tax filing and payments. For more information, visit the Oregon Revenue Online.

Simplify US payroll tax compliance with Deel

Understanding Oregon payroll taxes helps you meet all the state requirements. However, while this guide explains the basics, many laws and guidelines extend much further.

Deel offers a comprehensive solution for managing US and international payroll, including various payroll taxes and requirements. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.