As a small business owner, processing payroll is just one item on your to-do list, but ever-changing regulations and tax code updates can make it the most time-consuming task in a given week. These tax updates occur at the federal, state, and local levels, and depending on where your business is based and where your employees live, some small businesses have it tougher than others. We’ve started this monthly series to focus on state-specific tax considerations, to help you keep up with what’s changing around you.
We’ve previously covered New York and Pennsylvania. This month, our spotlight turns to Washington (WA). While this is by no means a comprehensive list of Washington tax and payroll regulations, we are highlighting a few key things to know.
In Washington, workers’ compensation is administered by the Washington State Department of Labor and Industries (WA L&I).
Employers must file WA L&I unless all employees meet the requirements to be excluded from coverage.
For all employees (hourly and salary), reporting and filing WA L&I should be based only on hours worked, and should not include vacation, sick, and/or holiday (even if paid leave).
For the purposes of WA L&I, salaried employee hours should be calculated at 160 hours per month, or 480 hours per quarter.
Note: If you own a small business in Washington, you’ll want to ask if your payroll provider allows for filing of WA L&I through payroll.
Last month, we discussed the complexity of Pennsylvania Local Service Taxes. Washington keeps things a bit more simple.
Washington is one of seven U.S. states that currently don’t have an income tax. Other states without an income tax are: Alaska, Florida, Nevada, South Dakota, Texas, and Wyoming.
What does this mean? If you’re a resident of Washington, you don’t need to file a state income tax return.
The Last Payday
Under Washington state law, an employer is required to issue a final paycheck to a terminated employee on or before the next regularly schedule pay date. The same rule applies for an employee who has quit—they are not entitled to a final paycheck until the next regularly scheduled pay date.
As you can see from our coverage of Washington, every state differs when it comes to payroll and taxes. So whether your business is in the Evergreen State, the Empire State, or any state in between, you want to be sure that you are keeping up with tax and regulatory changes at the federal, state, and local levels. This can be hard to do on your own, but there are resources to help.
If you’re considering outsourcing payroll to help cut down on administrative tasks and mitigate tax risk, here are some things to consider in selecting a provider:
- Do they have your back when it comes to payroll taxes?
- How long is their payroll processing time?
- Do they offer extended support hours on evenings and weekends?
We’ll be back August 29th with a spotlight on Oregon taxes.
This website contains articles posted for informational and educational value. SurePayroll is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, SurePayroll. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. If you require legal or accounting advice or need other professional assistance, you should always consult your licensed attorney, accountant or other tax professional to discuss your particular facts, circumstances and business needs.