US Payroll Tax Guide: Oregon

Key takeaways

Employers in Oregon must consider unemployment insurance, which provides financial assistance to eligible individuals who have lost their jobs involuntarily.
Personal income tax is levied on individuals' earnings, including wages, salaries, investment income, and other sources of personal income.
Workers' compensation, another employer consideration, is an insurance program that provides wage replacement and medical benefits to employees who suffer job-related injuries or illnesses.

Employers are responsible for various aspects of the business, from hiring and compliance to profit growth 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

Unemployment insurance is one of the several employer payroll taxes, also known as payroll withholding, that the employer withholds from an employee’s payroll. Other federal payroll taxes include Medicare and Social Security.

Also known as UI, the US Department of Labor administers unemployment insurance to provide temporary financial relief to individuals who are unemployed through no fault of their own. Employers withhold unemployment insurance premiums from Oregon employees’ payroll and pay the state, which can be managed online through the Oregon unemployment insurance online portal.

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

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.

After withholding the tax from your employee, the employer is 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.

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 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 Oregon’s online portal. The Oregon Department of Revenue provides additional information on statewide transit tax.

Note: Starting September 2022, you will file and pay the statewide transit tax through a new online system called FrancesOnline. The Oregon Employment Department provides more information on FrancesOnline.

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.

The WBF assessment is funded through employer and employee contributions through payroll withholdings. After you withhold the tax from your employee, you are responsible for paying the amount you withheld to the state. You can pay the withheld amount through Oregon’s online portal. For more information on paying the withholding amount, the Oregon Department of Consumer Business Services provides more information.

Note: Starting September 2022, you will file and pay the workers’ benefit fund assessment through a new online system called FrancesOnline. For more information about FrancesOnline, you can consult the Oregon Employment Department.

Paying and withholding paid family leave from your Oregon employee

Starting in January 2023, employers are required to make contributions to the Oregon Paid Family Leave (PFL) program. PFL allows an eligible employee to take time away from work to bond with a child during the first year after birth, adoption, or foster care placement.

PFL also covers time away from work for a family member with a serious health condition and to take safe leave for an employee experiencing issues related to domestic violence, harassment, sexual assault, or stalking.

PFL is funded through both employer and employee contributions through payroll withholdings. When you contribute to paid family leave, you will use FrancesOnline to file and pay for the program. For more information on PFL, you can visit the Oregon Employment Department.

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.

Simplify US payroll tax compliance with Deel

If you’re an employer in Oregon, then this guide provides essential information on Oregon payroll taxes, payroll compliance, and state requirements. To learn more, streamline the payroll process, and ensure full compliance, many companies turn to Deel.

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.

Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.