Oregon Payroll Calculator
Oregon Payroll Has More Moving Parts Than Most States
Oregon employers deal with a longer list of obligations than employers in most other states. Federal income tax, FICA, FUTA — those are universal. But Oregon adds state income tax withholding, a statewide transit tax (with both employee and employer portions), state unemployment insurance with a relatively high wage base of $47,700, and — for businesses in the Portland Metro area — the Metro Supportive Housing Services tax. That’s five or six separate line items to track per employee, per payroll run.
What Oregon Employers Pay Beyond Wages
The employer side of Oregon payroll includes several items that don’t touch the employee’s paycheck at all. The employer pays a matching 6.2% Social Security and 1.45% Medicare on employee wages. Oregon employers also pay a statewide transit tax at 0.1% of wages — matching the employee’s contribution. FUTA sits at 0.6% on the first $7,000 of wages per employee per year. Oregon SUTA applies on the first $47,700 per employee — significantly higher than the federal $7,000 base and most other states.
New Oregon employers are assigned a standard rate. Established employers get a rate based on their experience rating, which reflects their history of unemployment claims. Your actual SUTA rate appears on your Oregon Business Identification Number account. Check the Oregon Employment Department employer tax page for your specific assigned rate.
Oregon’s SUTA Wage Base Is One of the Highest
Oregon’s $47,700 SUTA wage base is a significant cost driver for employers of well-paid workers. A SUTA rate of 2.6% on $47,700 means an employer pays $1,240 in state unemployment taxes on a single employee each year before that wage base is exhausted. For a business with 20 employees all earning above that threshold, that’s $24,800 in SUTA alone — annually. Compare that to states with $7,000 or $10,000 wage bases and the difference is stark.
Full Oregon Payroll Formula and Example
Employer Cost = Gross Wages + Employer SS + Employer Medicare + Employer Transit + FUTA + SUTA
A Eugene non-profit pays a program coordinator $3,000 bi-weekly. The employee is single, contributes $300 to a 403(b), and the employer is in Lane County (not Metro).
- Gross wages: $3,000. Annual: $78,000
- Pre-tax 403(b): $300. Annual taxable: $70,200
- Federal tax on $70,200 (minus $14,600 standard = $55,600): approx $7,720 annual, or $297 per period
- Employee SS: $3,000 x 6.2% = $186
- Employee Medicare: $3,000 x 1.45% = $43.50
- Oregon state tax on $70,200 (minus $2,420 OR standard = $67,780): approx $5,310 annual, or $204 per period
- Employee transit: $3,000 x 0.1% = $3
- Employee net pay: $3,000 – $300 – $297 – $186 – $43.50 – $204 – $3 = $1,966.50
On the employer side: SS match $186, Medicare match $43.50, employer transit $3, FUTA $2.31 (if early in year, wage base not hit), SUTA $39 (2.6% x $3,000 if wage base not hit). Total employer cost per period: roughly $3,273.81 for a $3,000 paycheck.
If you’re modelling whether to hire employees or use contractors, our 1099 vs W-2 calculator breaks down the true cost difference from the employer’s perspective.
Key Oregon Payroll Rules Employers Must Know
- Oregon pay frequency requirements. Oregon law requires payment at least once per month for most salaried employees, and more frequently for hourly workers in certain industries. The Oregon Bureau of Labor and Industries enforces this. Many employers default to bi-weekly to stay clearly compliant.
- Final paycheck timing. If you terminate an employee, Oregon requires you to pay all wages immediately on the last day of employment. For employees who resign with less than 48 hours notice, you have until the next regular payday or within five days, whichever comes first. Getting this wrong triggers penalties of up to 30 days of wages.
- Oregon sick leave withholding interactions. Oregon’s Paid Leave Oregon (PLO) program requires both employer and employee contributions. These are separate from income tax withholding but appear on the same pay stub. Make sure your payroll system handles PLO contributions as a separate line item from state income tax withholding.
The Oregon Bureau of Labor and Industries wage laws page covers final pay, pay stubs, and deduction rules in detail.
FAQs
What is Oregon’s SUTA wage base?
Oregon’s state unemployment insurance (SUTA) wage base is $47,700 per employee per year. This is significantly higher than most states. SUTA applies only up to that amount — once an employee’s wages exceed $47,700 for the year, SUTA stops being due for that employee for the rest of the calendar year.
Does Oregon have a statewide transit tax for employers?
Yes. Oregon employers pay a statewide transit tax of 0.1% of employee wages, matching the 0.1% deducted from employees. This applies to all Oregon employers regardless of size and has no wage cap. It’s reported and paid to the Oregon Department of Revenue.
How does Oregon Paid Leave Oregon (PLO) affect payroll?
PLO requires contributions from both employers and employees. The contribution rate is set by the Oregon Employment Department and can change each year. Employers with 25 or more employees pay both an employer share and withhold the employee share. Employers with fewer than 25 employees only withhold the employee share.
What is the Oregon statewide transit tax wage base?
The Oregon statewide transit tax has no wage base cap. It applies to all wages paid in Oregon throughout the entire year, unlike FUTA and SUTA which stop after a wage base is reached. Both the employer and employee portion of the transit tax apply on every dollar of wages.
Does Oregon require a specific pay stub format?
Oregon requires employers to provide a written or electronic pay stub at each payment. The stub must show gross wages, itemized deductions, and net pay at minimum. Itemized deductions means each tax and withholding must be listed separately — you can’t just show a total withholding number.
How is Oregon state income tax withholding calculated?
Oregon withholding is calculated using the employee’s Form OR-W-4 allowances and the Oregon withholding tax formula published by the Oregon Department of Revenue. The tax uses Oregon’s four brackets (4.75%, 6.75%, 8.75%, 9.9%) and Oregon’s own standard deduction, not the federal standard deduction.
What happens if an Oregon employer doesn’t withhold state income tax?
Employers who fail to withhold and remit Oregon state income tax face penalties, interest, and potential personal liability for the unremitted amounts. Oregon takes payroll withholding compliance seriously, and the Oregon Department of Revenue can pursue the business and its responsible officers personally for unremitted taxes.