In case you’re an employer in Seattle, Washington, it’s possible you’ll have to know concerning the JumpStart tax. The tax helps fund companies for Seattle’s low-income inhabitants. Learn on to be taught extra about Seattle’s JumpStart tax.
What’s the Seattle JumpStart tax?
On July 6, 2020, Seattle’s metropolis council authorized a brand new payroll expense tax for sure companies working in Seattle. The JumpStart Seattle tax took impact on January 1, 2021 and at the moment has an finish date of December 31, 2040.
Once more, the JumpStart payroll expense tax offers companies to Seattle’s low-income inhabitants. The tax additionally helps replenish Seattle’s Emergency Administration Fund and Income Stabilization Fund.
Who’s accountable for the Seattle payroll expense tax?
The Seattle JumpStart tax is an employer-funded tax. Employers can not make deductions from staff’ compensation for this tax.
So, which employers should pay the tax? That you must pay the tax on worker wages in 2024 when you have:
- Greater than $8,511,281 in annual payroll bills in 2023 AND
- At the least one worker with annual compensation of $182,385 or extra in 2024
In case 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 alter yearly. The best tax solely applies to corporations 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 don’t have to pay into the JumpStart tax:
- Companies with annual compensation of lower than the edge
- 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 can 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 you could pay the brand new tax, take a look at 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 authentic publication date of January 27, 2021.
This isn’t meant as authorized recommendation; for extra data, please click on right here.
