Washington's Paid Family Leave
Beginning January 1, 2019, the State of Washington will require employers and employees to pay a premium for Paid Family and Medical Leave. Depending on how many employees are in the company this can either be just an employee deduction or an employee deduction and an employer expense.
In 2023, the premium rate is 0.8 percent of each employee’s gross wages, not including tips, up to the 2023 Social Security cap ($160,200). This premium is divided between the employer and the employee as follows:
- Employee premium (mandatory for all employees): In 2023, up to 72.76% can be paid by the employee. Employers are required to either withhold this amount from each employee’s paycheck or pay it on their employees’ behalf.
- Employer premium (mandatory for businesses with 50+ employees): About 27.24% of the premium is the employer’s share. If your business has 50 or more employees, you must pay the employer share of the premium. This is determined each September and takes effect the following January for that full calendar year. If you have fewer than 50 employees, you don’t have to pay the employer premium unless you have received a small business assistance grant.
All employers may either withhold employees’ premiums from their paychecks or pay some or all of the premium on their employees’ behalf. Employers cannot collect missed premiums in later pay periods.
Please speak to your accountant about the approach that works best for your business.
This article provides rates as of January 2023 however you need to verify these rates on your own or with an accountant to ensure accuracy.
You can find more information about Washington’s Paid Family and Medical Leave at the following website: https://www.paidleave.wa.gov/
How to Set Up an Employee Deduction
- From the Payroll Command Center, click Payroll Categories.
- Click on the Deductions tab.
- Click the New button to create a new deduction.
- Provide a Deduction name, ie, WA Paid Family Leave.
- Under Type of Deduction, click on the button for Percent. Enter the contribution rate. As of January 2023 for an employer with over 50 employees this rate must be set as no more than .582% of Gross Wages (72.76% of .8%).
- In the Deduction Limit, Select the Equals Dollars button and Dollars per Year. Enter $932.36 ($160,200 Wage Limit x .582%).
- Click the Employee button at the bottom and check off all of the employees this applies to, then click OK.
- Click OK to close out of the employee deduction.
- Next you need to set up the employer side of the expense. As of January 2023 this is only required for employers with more than 50 employees.
- From the Payroll Categories List window click the Expenses tab.
- Click the New button at the bottom of the screen to Create a New Employer Expense.
- Set the Type of Expense to: PFML.
- For an employer with over 50 employees this rate must be at least 0.218% of Gross Wages (27.24% of .8%). For an employer with fewer than 50 employers this employer expense is not required.
- Set the Wages Limit to $160,200 (The Social Security Taxable Wage Base)