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.
As of January 2019 the initial premium will be .4% of an employee’s gross wages. Employers with over 50 employees must pay out a portion of this premium themselves.
- Employers with over 50 employees can withhold up to 63.33% of this premium from an employees paycheck (as a deduction) and pay the remaining 36.67% of the premium themselves (as an expense).
- Employers with fewer than 50 employees are not required to pay the employer portion of the premium.
Please speak to your accountant about the approach that works best for your business.
This article provides rates as of January 2019 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, Paid Family Leave.
- Under Type of Deduction, click on the button for Percent. Enter the contribution rate. As of January 2019 for an employer with over 50 employees this rate must be set as no more than .253% of Gross Wages (63.33% of .4%).
- If applicable enter a deduction limit.
- 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 2019 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 to create a new employer expense.
- Set the Type of Expense as Other.
- Under Type of Deduction, click on the button for Percent. Enter the employer contribution rate. For an employer with over 50 employees this rate must be at least 0.147% of Gross Wages (36.67% of .4%). For an employer with fewer than 50 employers the employer expense is not required.
- If applicable set an Expense Limit.