Payroll tax in Oregon: What employers need to know [Updated 2026]
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Whether hiring an Oregon resident or a nonresident who works within state boundaries, it's crucial to know your payroll tax requirements. But this can get tricky. You have to comply with federal tax requirements for Medicare and Social Security, but you also have to withhold state income taxes and contributions to Oregonian social service programs—like taxes to fund transit systems and a paid family leave scheme. In 2026, Oregon employers face notable changes, including a doubling of the Statewide Transit Tax rate.
If you want the low-down on which payroll taxes Oregon businesses need to file, how much they need to contribute, and how to file them, read our 2026 guide below.
The 5 Oregon state payroll taxes
The Oregon Department of Revenue (DOR) administers the state's payroll taxes, which requires employers to withhold a portion of Oregon employee wages to cover their tax liability. The state has a progressive income tax, where higher earners pay a higher tax rate, which applies to both Oregon residents and nonresidents working at an Oregon-based company. Employees who either live or work beyond Oregon state lines may be entitled to a credit on mutually taxed income.
Learn more about Oregon's employer taxes below.
State unemployment insurance tax
Oregon's Employment Department administers taxpayer-funded Unemployment Insurance (UI), which provides temporary payments to Oregonians who lost their job or earnings for reasons out of their personal control. These payroll taxes are provisioned by the State Unemployment Tax Act (SUTA) and placed in a UI Trust Fund with the US Department of Treasury. In 2026, new employers pay a base rate ranging from 2.1% to 2.7% depending on industry, and the taxable wage base is $56,700.
Who pays | Employer |
|---|---|
Tax rate (approximately) | New employers: 2.1%–2.7% (varies by industry, 2026) Experienced employers: 0.9%–5.4% |
Taxable wage base | $56,700 per employee (2026) |
Keep in mind that this state-run unemployment fund is separate from requirements under the Federal Unemployment Tax Act (FUTA). But Oregon employers who pay out their state UI can get up to a 5.4% tax credit on federal unemployment taxes.
State income tax
Oregon levies a gradual personal income tax according to an employee's taxable income, which employers withhold from wages. The rate schedule is in the table below:
Tax rate | Taxable income (single filers, 2026 — brackets indexed annually for inflation) |
|---|---|
4.75% | $0 – ~$18,400 |
6.75% | ~$18,401 – ~$46,500 |
8.75% | ~$46,501 – ~$250,000 |
9.9% | Over ~$250,000 |
Rates differ for those who file jointly with a partner, as qualified widows or widowers, or as heads of households, and for part-year Oregon residents or for nonresidents who work in Oregon. Flat taxes range from $192 to $21,305, and taxes on excess income range from 4.75% to 9.9%.
Consult Oregon's individual income tax guide, Publication OR-17, to learn how to determine and calculate an individual's income tax rate and withholdings.
Taxpayers who live or work in Multnomah County (which houses Portland) and make more than $125,000 annually have to pay an additional personal income tax, currently starting at $225 and rising to $9,375 for higher incomes, to fund preschool programs.
Transit Tax
Unique to Oregon are transit taxes, where employers withhold a small portion of employee wages to help fund Portland's TriMet transit system and the Lane Transit District, which serves Eugene and the rest of Oregon's Lane County. Employers who pay wages in areas that serve these metro areas are responsible for paying the tax. As of 2026, employers in the TriMet district pay a transit tax rate of 0.8237% of employee wages, and employers in the Lane Transit District pay 0.79%.
Additionally, all employers of Oregon residents or nonresidents who work in Oregon must withhold an additional 0.2% of employee wages for a Statewide Transit Tax scheme. This rate doubled effective January 1, 2026—up from 0.1% in prior years—marking the first rate increase since the program's inception in 2018. Employers should ensure their payroll systems reflect this change.
Workers' compensation insurance
Oregon state law requires most employers to provide workers' compensation insurance to cover expenses for employees who suffer work-related injuries or illnesses. Employers can get coverage through any third-party insurance agency licensed to offer workers' compensation coverage in Oregon.
While the coverage itself isn't a payroll tax, employers need to pay a Workers' Benefit Fund (WBF) assessment. This is currently set at 2 cents per hour worked per employee.
Paid Leave Oregon
Oregon's paid leave program allows employees to take up to 12 weeks of paid annual leave. In 2026, the total contribution rate is 1% of gross wages up to a wage base of $184,500. Employers with 25 or more employees contribute 40% of that (0.4%), while employees contribute the remaining 60% (0.6%). Small businesses with fewer than 25 employees can make optional contributions. Employers who offer equivalent private plans may be exempt.
Navigating Oregon's niche local tax schemes—including the doubled Statewide Transit Tax—may sound complicated. Luckily, Rippling's payroll compliance software is here to help.
Rippling automatically calculates your taxes and submits your tax forms and employer withholdings on your company's behalf—including all the state-specific Oregon levies that change year to year. The powerful solution handles taxes at the federal and Oregon state and local levels to monitor compliance and prevent infractions. What's more, Rippling's PEO can register and maintain your state tax accounts for you, automating even more of the payroll tax process.
Payroll tax due dates in Oregon
According to the Oregon DOR, all state payroll taxes are due on the same dates as federal tax returns administered by the IRS, which are typically filed quarterly on the last day of April, July, October, and January every calendar year. This includes Oregon income tax withholdings, unemployment contributions, Workers' Benefit Fund assessment payments, and transit taxes.
How to submit payroll taxes in Oregon
Once you know which payroll taxes employers are on the hook for and when those taxes are due, the next step is paying them. The first step is creating a Revenue Online account through the state government website, where you can register for a Business Identification Number (BIN), view your tax account, and make tax payments. You also need to submit a Combined Employer's Registration form before running payroll for the first time.
Once you have a handle on the paperwork, you can use the Frances Online e-filing system for employers, where you can submit ACH payments, monitor account info, and submit appeals. You can also order quarterly payroll tax reports from the Oregon Employment Department in Salem to file payroll taxes manually. You can also pay by phone at 800-356-4222. Visit the Employment Department for a full list of payroll tax forms.
Rippling's full-service payroll software
Oregon has some of the most complex state-level payroll tax requirements in the country—including progressive income tax brackets, multiple transit taxes, Paid Leave Oregon contributions, and a WBF assessment. And with the Statewide Transit Tax doubling to 0.2% in 2026, staying current is critical. Rippling's payroll software keeps pace with every rate change automatically, so you always file the right amounts with the right agencies—on time, every time. No spreadsheets. No manual lookups. No risk of non-compliance.
Frequently Asked Questions
Are there local tax laws in Oregon?
Yes. In addition to federal tax requirements, Oregon employers have to withhold state personal income taxes, unemployment insurance, workers’ compensation, transit taxes, and paid leave. The state income tax is levied at a progressive rate and all payroll tax filings are due quarterly.
Can your tax returns be audited in Oregon?
Yes, Oregon law permits the Employment Department to audit payroll taxes to ensure compliance. An auditor can check whether taxable wages were accurately calculated and review both federal and state returns. It typically covers three to seven years.
What employee information do employers need to file payroll taxes?
To file payroll taxes in Oregon, the DOR needs the following information for each employee:
Social Security Number
First initial
Last name
Total hours worked
State income tax withholding
State Transit Tax (STT) subject wages
STT withholding
UI subject wages
Paid Leave subject to wages
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Vanessa Kahkesh
Content Marketing Manager, HR
Vanessa Kahkesh is a content marketer for HR passionate about shaping conversations at the intersection of people, strategy, and workplace culture. At Rippling, she leads the creation of HR-focused content. Vanessa honed her marketing, storytelling, and growth skills through roles in product marketing, community-building, and startup ventures. She worked on the product marketing team at Replit and was the founder of STUDENTpreneurs, a global community platform for student founders. Her multidisciplinary experience — combining narrative, brand, and operations — gives her a unique lens into HR content: she effectively bridges the technical side of HR with the human stories behind them.
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