We would like to remind you that the WA Paid Family & Medical Leave tax rate will increase in the new year. Effective January 1, 2022, the rate will increase from 0.4% to 0.6%. Also, the employer and employee portions of the tax will be adjusted. Employers with 50 or more employees will now pay 26.78% of the tax and the employee will pay 73.22%. Employers with fewer than 50 employees will not be taxed, but must still remit the employee’s portion of the tax. The employer can also voluntarily pay the tax on behalf of the employee.
- Example 1: If a business has 50 or more employees, then the total WA PFML tax on an employee’s wages of $100,000 would be ($100,000 * 0.006) = $600. Of this $600 of tax, the employer would owe ($600 * 0.2678) = $160.68. The employee would owe ($600 * 0.7322) = $439.32.
- Example 2: If a business has fewer than 50 employees, then the total WA PFML tax on an employee’s wages of $100,000 would be ($100,000*0.006*0.7322) = $439.32. The employer would owe no tax, but the employee would owe $439.32.
Additionally for 2022, the WA PFML wage cap will increase from $142,800 to $147,000. The WA PFML tax will not apply to an employee’s wages exceeding this threshold. - Example 3: If a business has fewer than 50 employees, then the total WA PFML tax on an employee’s wages of $200,000 would be ($147,000 * 0.006 * 0.7322) = $645.80. The employer would owe no tax, but the employee would owe $645.80.
Please let us know if you have any questions.
