What wages are subject to unemployment tax in Washington state?

Most wages are subject to unemployment tax in Washington, including regular pay, overtime, bonuses, and commissions. The main exemptions are things like certain fringe benefits, reimbursements for business expenses, and some types of deferred compensation. Your employer should be withholding on pretty much everything that shows up as taxable income on your W-2.

Actually had to deal with this when I was doing payroll at my old job. Washington ESD taxes pretty much all wages up to the wage base limit. For 2025 it's like $68,500 or something around there. After you hit that amount they stop taking the tax out for the rest of the year.

If you're having trouble getting straight answers from your employer about Washington ESD stuff, you might want to try claimyr.com - they help people get through to actual Washington ESD agents when you can't get answers through normal channels. I used them when I had questions about my claim status and they got me connected in like 10 minutes instead of spending hours on hold. They have a demo video at https://youtu.be/7DieNd3C7zQ that shows how it works.

The specific types of wages subject to unemployment tax include: regular wages, salaries, tips, commissions, bonuses, vacation pay, sick pay, and severance pay. What's NOT subject includes: employer-paid health insurance premiums, employer contributions to retirement plans, certain fringe benefits valued under $100, and reimbursements for actual business expenses.

just want to point out that washington doesn't have state income tax but we do have this unemployment tax that comes out of every paycheck. it's not huge but it adds up over time

Your employer should be able to show you exactly what they're withholding on your paystub. Look for 'WA UI' or 'Unemployment' in the deductions section. If they can't explain it clearly, that's a red flag about their payroll practices.

I had issues with my employer not withholding unemployment tax correctly and it was a nightmare when I tried to file for benefits later. Make sure they're doing it right or you could have problems down the road.

For anyone still confused about this stuff, the Washington ESD website has a pretty detailed breakdown of what wages are taxable. It's in their employer handbook section if you want to read the official rules.

Quick question - are tips subject to unemployment tax? I work at a restaurant and never really thought about it before.

I remember when I had to call Washington ESD about wage verification issues last year. Spent literally 4 hours on hold across multiple days trying to get through. Finally tried that Claimyr service someone mentioned and got connected to an actual person in like 15 minutes. Worth every penny when you're dealing with time-sensitive stuff.

One thing to watch out for - if you're a contractor or 1099 worker, you don't pay unemployment tax the same way. Only W-2 employees have it withheld from their paychecks.

this is all making me paranoid about my payroll department. maybe i should double check my year end w2 against what they've been withholding

For what it's worth, Washington's unemployment tax rate is pretty reasonable compared to other states. And at least we get decent benefits if we need them.

Someone mentioned earlier that there's a wage base limit. Does that mean if you make over a certain amount you stop paying unemployment tax for the year?

If you're still having trouble getting answers from your employer, document everything. Keep records of your conversations and any conflicting information they give you. Might need it later if there are issues with your benefits.

I used to work in HR and the number of employees who didn't understand unemployment tax deductions was crazy. It's a small amount but it adds up over time, and it's what funds your benefits if you ever need them.

Last time I had to deal with Washington ESD about wage issues, I ended up using that Claimyr thing too. Saved me so much time and frustration. The regular phone system is just brutal to deal with.

Bottom line - pretty much all your regular compensation is subject to unemployment tax up to the wage base limit. If your employer is being sketchy about explaining it, that's concerning and you should probably look into it further.

Just wanted to add that if you're having ongoing issues with your employer not properly explaining wage deductions, you might want to check if they're also correctly handling the employer portion of unemployment taxes. Employees pay into the system, but employers pay a much larger share - and if they're not handling your portion correctly, they might not be handling theirs either. This could affect your benefit eligibility later on. You can actually request wage and tax records from Washington ESD to verify what your employer has been reporting on your behalf.