“Hours Method” Now Available for Calculating the Seattle Payroll Expense Tax

As detailed in the original article published by Clark Nuber, in July 2020, the Seattle City Council passed City Ordinance 126108 establishing a new Seattle payroll expense tax that takes effect January 1, 2021.

Updates to the Original Tax

Following the passage of that ordinance, the Department of Finance and Administrative Services (FAS) conducted a rulemaking process and then published a Director’s Rule for the payroll tax. As a part of that process, FAS staff received numerous questions from businesses about how to apply the payroll expense allocation methodology included in the ordinance, especially in situations where employees split their time between work in Seattle and work in other jurisdictions.

 » Read more

How the Seattle Payroll Tax Affects Non-Profit Healthcare Entities

On July 6, 2020, the Seattle City Council passed City Ordinance Number 126108, imposing a payroll expense tax on persons engaging in business in Seattle. The ordinance took effect at the start of 2021 and sunsets at the end of 2040.

The tax is imposed on businesses and organizations with $7 million or more of Seattle annual “payroll expense.” However, for the period of January 1, 2019 through December 31, 2023, non-profit healthcare entities are exempted from the tax on the payroll expense of employees with annual compensation below $400,000.

The following will discuss the non-profit healthcare entity exemption and provide examples of the payroll tax in action.

 » Read more

Media Contact

Dustin VandeHoef
Marketing Manager
Clark Nuber
Phone: 425-454-4919
Contact Dustin