Do business owners have to pay Washington ESD unemployment on themselves?
I just started an LLC in Washington state and I'm trying to figure out if I need to pay unemployment taxes on myself as the owner. I've been reading conflicting information online and the Washington ESD website is confusing. Do I have to register with Washington ESD and pay UI taxes on my own wages? Or is this only for employees? I don't have any other employees right now, just me.
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Aiden Chen
Generally no, business owners don't pay unemployment taxes on themselves in Washington. If you're a sole proprietor or single-member LLC owner, you're considered self-employed and not eligible for unemployment benefits, so you don't pay into the system.
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Sophia Bennett
•That's what I thought but someone told me LLCs might be different? I'm set up as a single-member LLC.
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Aiden Chen
•Single-member LLCs are treated the same as sole proprietorships for unemployment purposes in Washington. You're good.
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Zoey Bianchi
wait i thought all businesses had to register with washington esd regardless?? i'm so confused about this too
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Christopher Morgan
•You only need to register with Washington ESD if you have employees. No employees = no registration required for unemployment purposes.
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Zoey Bianchi
•oh ok that makes more sense. i was panicking thinking i messed something up lol
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Aurora St.Pierre
This is actually more complex than people realize. If you elect to be taxed as an S-Corp, you become an employee of your own corporation and technically should pay unemployment taxes. But most small business owners don't know this.
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Sophia Bennett
•I haven't made any S-Corp election, just the default LLC taxation. So I should be fine right?
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Aurora St.Pierre
•Yes, default LLC taxation means you're self-employed for unemployment purposes. No UI taxes required on yourself.
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Grace Johnson
I had this same question last year when I started my consulting business! Spent hours trying to get through to Washington ESD to get a straight answer. Finally used claimyr.com to actually reach an agent who explained everything clearly. They have a video demo at https://youtu.be/7DieNd3C7zQ that shows how it works.
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Sophia Bennett
•How much does something like that cost? I'm trying to keep startup expenses low.
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Grace Johnson
•It was worth it for me to get definitive answers instead of guessing. Much cheaper than making a mistake with Washington ESD requirements.
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Jayden Reed
•Never heard of claimyr but that video demo looks legit. Might try this for my own business questions.
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Nora Brooks
The Washington ESD rules are clear if you know where to look. RCW 50.04.165 specifically excludes business owners from coverage unless they elect coverage. Most don't because they can't collect benefits anyway.
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Sophia Bennett
•Can business owners elect coverage if they want to? Like as optional?
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Nora Brooks
•Yes, some business owners elect coverage so they can potentially collect unemployment if the business fails. But it's rare and you have to meet specific requirements.
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Eli Wang
ugh the whole washington esd system is so confusing for small business owners. they make everything so complicated when it should be simple
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Cassandra Moon
•agreed! i spent days trying to figure this out for my photography business
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Zane Hernandez
•At least unemployment is simpler than L&I requirements. That's where the real headaches begin for Washington businesses.
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Genevieve Cavalier
Important clarification: if you have even one employee (including family members), you must register with Washington ESD and start paying unemployment taxes. The threshold is zero - one employee triggers the requirement.
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Sophia Bennett
•Good to know! I might hire someone part-time next year so I'll need to remember this.
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Genevieve Cavalier
•Yes, and you have to register within 30 days of hiring your first employee. Don't wait.
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Ethan Scott
•This caught me off guard when I hired my first contractor. Thought I had more time to register.
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Lola Perez
My accountant told me the same thing - no employees means no Washington ESD registration for unemployment. But make sure you understand the difference between employees and independent contractors.
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Sophia Bennett
•Yeah I've heard the contractor vs employee thing is really strict in Washington state.
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Lola Perez
•Super strict. Washington ESD will reclassify contractors as employees if they don't meet the independence test.
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Nathaniel Stewart
been running my business for 3 years, never paid unemployment on myself, never had issues. you're overthinking this
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Sophia Bennett
•That's reassuring to hear from someone with experience. Thanks!
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Riya Sharma
•Same here, 5 years in business, only started paying when I hired employees.
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Santiago Diaz
The confusion often comes from mixing up different types of business taxes. You might need to pay self-employment tax federally, but that's completely separate from Washington state unemployment insurance.
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Sophia Bennett
•Right, I knew about the federal self-employment tax. Just wasn't sure about the state unemployment piece.
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Santiago Diaz
•Exactly. Federal and state requirements are totally different systems with different rules.
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Millie Long
If you're really unsure, you could try that claimyr service someone mentioned earlier. I used it last month to get clarification on my claim status and it actually worked. Got through to a real Washington ESD person in minutes instead of being on hold forever.
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Sophia Bennett
•Might be worth it just for peace of mind. These business compliance questions stress me out.
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KaiEsmeralda
•I was skeptical about paying for something like that but honestly it saved me hours of frustration trying to reach Washington ESD directly.
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Debra Bai
Bottom line: single-member LLC with no employees = no Washington ESD unemployment taxes required on yourself. Once you hire someone, everything changes and you need to register immediately.
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Sophia Bennett
•Perfect, that's exactly what I needed to know. Thanks everyone for the help!
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Gabriel Freeman
•Glad we could clear this up for you. It's a common question that trips up new business owners.
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Laura Lopez
•Definitely save this thread for when you're ready to hire. The rules change completely once you have employees.
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Yuki Ito
Just wanted to add another perspective - I'm an accountant who works with small businesses in Washington state. The answers here are correct: single-member LLCs don't need to pay unemployment taxes on themselves unless they elect coverage (which is rare). However, I always recommend keeping good records of your business structure and any elections you make, because if you ever do hire employees, Washington ESD will want to verify your prior status. Also remember that this only applies to unemployment insurance - you'll still need to handle other business registrations like your business license and potentially B&O tax depending on your revenue.
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Emily Parker
•This is really helpful to hear from a professional! Quick question about the B&O tax - do you know what the revenue threshold is for that? I'm still pretty small but want to make sure I don't miss any filing requirements.
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Sophia Clark
•@Emily Parker For B&O tax in Washington, you need to register once your gross receipts hit $12,000 in a calendar year or (you expect to hit that threshold .)Some business activities have different thresholds though - like $28,000 for certain service businesses. The filing is annual if you re'under $50,000, but you should register as soon as you cross the threshold even if you don t'owe tax yet. Washington DOR is pretty strict about late registration penalties.
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