Changes Related to Payroll Taxes Effective in 2023

Changes Related to Payroll Taxes Effective in 2023:

1.       The deduction for PFML will be changing:  https://paidleave.wa.gov/updates/

STARTING JAN. 1, 2023:

• The total premium rate will be 0.8%.

• Employers will pay 27.24% of the total premium, and employees will pay 72.76%.  (The deduction will be .08 x .7276 = 0.058208 of gross wages for employees)

• Employers will continue to report each employee’s total gross wages, not including tips, and collect premiums up to the Social Security cap. Once an employee meets the Social Security cap, you must stop collecting premiums but continue to report their wages.

• Businesses classified by the Employment Security Department as having fewer than 50 employees are not required to pay the employer portion of the premium. However, they must still collect the employee premium or pay the employees’ premiums on their behalf.

2.       WA Cares Act deduction is set to begin on July 1, 2023:  https://paidleave.wa.gov/small-businesses/

This is the long-term care deduction.

3.       For the 4th Quarter of 2022, WA State Unemployment (EAMS) returns must now include a SOC code for each class of employee:  https://www.esd.wa.gov/employer-taxes/about-soc

All major payroll providers will support this change, effective when the 4th quarter State Unemployment Returns are filed.  Employers MUST add these codes to employee payroll records so that the 4th quarter EAMS return can be filed. 

4.       The wage limit for Social Security Taxes has increased to $160,200 for 2023.