Washington Workers Face Higher Payroll Taxes as Paid Leave Costs Rise
12h ago · 8:12
Washington workers will face higher payroll deductions in 2027 as the state's Paid Family and Medical Leave (PFML) premium rate increases to 1.2% of covered wages.
The total Washington Paid Family and Medical Leave premium rate began at 0.4% in 2019, meaning the 2027 rate is three times the program's original level.
The increase comes as Washington workers continue facing concerns about the cost of living, including gas prices, groceries, housing and insurance.
WASHINGTON PAYROLL TAX INCREASE IN 2027
Washington's Paid Family and Medical Leave program provides eligible workers with partial wage replacement when taking qualifying family or medical leave, including time off for childbirth, adoption or caring for a family member.
The program is funded through payroll premiums shared between employees and employers, with workers paying the larger portion.
As the total premium rate rises to 1.2% in 2027, the increase will affect payroll deductions and take-home pay for covered Washington employees.
WASHINGTON POLICY CENTER QUESTIONS RISING COSTS
Elizabeth New of the Washington Policy Center argues that higher payroll deductions place additional financial pressure on workers who may already be struggling with everyday expenses.
New questions whether workers should have the option to participate in the program and raises concerns about differences in benefit usage across income groups.
According to figures cited in the report, workers earning $61 an hour or more accounted for nearly 20% of Paid Family and Medical Leave claims in fiscal year 2026, compared with approximately 8% from workers in the lowest wage group.
These figures describe the distribution of claims by wage group, not the likelihood of an individual worker filing a claim.
COULD WASHINGTON'S PAYROLL PREMIUM RISE TO 2%?
The report also discusses concerns about the program's long-term funding and whether Washington lawmakers could consider raising the statutory premium cap.
New expects renewed debate during the 2027 legislative session, including possible proposals to allow premium rates as high as 2%.
A 2% rate is not currently established by the figures discussed in this report.
Washington state Senator Curtis King has also advocated changes to the Paid Family and Medical Leave program, including restrictions on repeated use.
WHO BENEFITS FROM WASHINGTON'S PAID LEAVE PROGRAM?
The debate raises questions about affordability, income differences, worker benefits and the long-term cost of state-administered programs.
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