Overview of Washington Taxes
Washington is one of seven states with no income tax, and there are no cities in the state that have local income taxes either. Washington earners will still have to pay federal income taxes, though.
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- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Washington Paycheck Calculator
Washington Paycheck Quick Facts
- Washington income tax rate: 0%
- Median household income: $70,116 (U.S. Census Bureau)
- Number of cities that have local income taxes: 0
How Your Washington Paycheck Works
Washington state does not impose a state income tax, but federal income and FICA (Federal Insurance Contribution Act) taxes are unavoidable, whether you work at Boeing, Microsoft or your corner Starbucks.
How much you pay in federal income taxes depends on a few different factors like your marital status, salary and if you want an additional dollar withholding. You have to enter information about your filing status and dependents on your W-4; this form is how your employer knows how much to withhold from your paycheck. This is why your employer will require you to fill out a W-4 whenever you start a new job. You should also fill out a new W-4 anytime you experience life changes, such as a marriage, divorce or the birth of a child.
Note that President Trump's 2017 tax plan caused a slight change in withholding calculations for the federal income tax. While these changes took effect in early 2018, there were no updates in 2019. It’s still a good idea to regularly check your W-4 to make sure your information stays accurate and up to date.
The advice above is especially pertinent now, as the 2020 W-4 includes notable revisions. More specifically, it removes the option to claim allowances and instead focuses on a five-step process that lets filers enter personal information, claim dependents or indicate any additional income or jobs. The form must be filled out by all employees hired on or after Jan. 1, 2020. But if you were hired before 2020, you aren't required to complete it unless you're adjusting your withholdings or changing jobs in 2020.
FICA taxes are made up of Medicare and Social Security. Workers have to pay 1.45% of their wages for Medicare tax and 6.2% for Social Security tax. Employers then match those percentages so the total contributions are doubled. Income you have in excess of $200,000 is subject to an additional 0.9% Medicare surtax. Employers don’t match this surtax. Self-employed individuals have to pay the full 2.9% in Medicare taxes and 12.4% in Social Security taxes themselves, as there is no separate employer to contribute the other half. However, there is a deduction available during tax season to help recoup some of that high self-employment tax.
The paycheck you take home may be further reduced if you contribute funds toward a health or life insurance plan that your employer sponsors, as any premiums you pay will be deducted from your wages. This is also the case if you contribute to a retirement account through your employer, like a 401(k) or 403(b), or a medical expense account, such as a health savings account (HSA) or flexible spending account (FSA). These retirement and medical expenses accounts use pre-tax dollars, which means that while putting money in these shrinks your paycheck, it also allows you to pay less in taxes.
Another thing to consider is that the frequency of your pay impacts the size of your paychecks. If you get paid bi-weekly, for example, your paychecks will be more frequent and smaller than if you get paid just once a month. If you get paid monthly, you will see fewer but larger paychecks. It's important to budget accordingly.
Washington Median Household Income
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Tax Day is a lot less painful for Washingtonians than for workers in many other parts of the country. That’s because the Evergreen State does not levy income taxes at the state level. Lawmakers have considered introducing a state income tax in recent years but no attempt has been successful so far.
While local sales taxes in Seattle, Tacoma and some other metro areas are significantly higher than the national average, these cities – and all areas in Washington – are devoid of local income taxes, as well.
A financial advisor in Washington can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
How You Can Affect Your Washington Paycheck
While you don’t have to worry about paying state or local income taxes in Washington, there’s no escaping federal income tax. However, there are certain steps you may be able to take to reduce the taxes coming out of your paychecks.
The simplest way to change the size of your paycheck is to adjust your withholding. Your paychecks will be smaller but you’ll pay your taxes more accurately throughout the year. You can also specify a dollar amount for your employer to withhold. There is a line on the W-4 that allows you to specify how much you want withheld. Use the paycheck calculator to figure out how much to put.
Another thing you can do is put more of your salary in accounts like a 401(k), HSA or FSA. If you contribute more money to accounts like these, your take-home pay will be less but you may still save on taxes. These accounts take pre-tax money, which means the money comes out of your paycheck before income taxes are removed. This reduces your taxable income. Payments you make for most employer-sponsored health and life insurance plans also pre-tax.
With no state or local income taxes, you might have an easier time saving up for a down payment for a home in Washington. If you’re looking to make the move, take a look at our guide to Washington mortgage rates and getting a mortgage in Washington.
Most Paycheck Friendly Places
SmartAsset's interactive map highlights the most paycheck friendly counties across the country. Zoom between states and the national map to see data points for each region, or look specifically at one of the four factors driving our analysis: Semi-Monthly Paycheck, Purchasing Power, Unemployment Rate, and Income Growth.
Methodology Our study aims to find the most paycheck friendly places in the country. These are places in the country with favorable economic conditions where you get to keep more of the money you make. To find these places we considered four different factors: semi-monthly paycheck, purchasing power, unemployment rate and income growth.
First, we calculated the semi-monthly paycheck for a single individual with two personal allowances. We applied relevant deductions and exemptions before calculating income tax withholding. To better compare withholding across counties we assumed a $50,000 annual income. We then indexed the paycheck amount for each county to reflect the counties with the lowest withholding burden.
We then created a purchasing power index for each county. This reflects the counties with the highest ratio of household income to cost of living. We also created an unemployment rate index that shows the counties with the lowest unemployment. For income growth, we calculated the annual growth in median income over five years for each county and indexed the results.
Finally, we calculated the weighted average of the indices to yield an overall paycheck friendliness score. We used a one half weighting for semi-monthly paycheck and a one-sixth weighting for purchasing power, unemployment rate and income growth. We indexed the final number so higher values reflect the most paycheck friendly places.
Sources: SmartAsset, government websites, US Census Bureau 2017 5-Year American Community Survey, MIT Living Wage Study, Bureau of Labor Statistics