Washington Paid Family & Medical Leave premiums increase Jan. 1

December 16, 2022

Starting January 1, 2023, the premium rate for Washington’s Paid Family & Medical Leave will increase from 0.6% in 2022 to 0.8%. The program says the increase is necessary to keep up with the rise of people using the program. This change will affect all business owners and the amount collected from employees’ gross wages each pay period.

Calculating the new rate

To calculate each employee’s total withholding, multiply their gross wages by the new rate (gross wages x .008). Based on the size of your company will determine if your business will be required to pay the employer portion.

On January 1, start collecting the new premium rate from your employees each pay period. No matter the size of your business, you must remit the premium to ESD quarterly, with the first quarter due at the end of April 2023.

What you need to know

• The premium rate is determined using contributions and benefits paid data during the previous year. This calculation is revised annually on September 30 with an effective date of January 1 and cannot be withheld retroactively.
• Businesses with more than 50 people employed will pay 27.24% of the total premium, and their employees will pay 72.76% of the total premium.
• Small businesses with fewer than 50 employees are not required to pay the employer portion of the premium; however, they are still required to collect or pay the employee portion (72.76%) of the premium on the employee’s behalf.
• Employers can choose to withhold the entire 72.76% from their employee’s paycheck, or they can cover all or some of the premium on the employee’s behalf.
• Employers will continue to report each employee’s total gross wages, not including tips, and collect premiums up to the Social Security cap ($160,200 in 2023). Once an employee meets the Social Security cap, you must stop collecting premiums but continue to report their wages.

Tell employees: Premiums increase Jan. 1

If you have not notified your employees of this change, don’t wait. These changes will be effective as of January 1, 2023. Advise your staff as soon as possible of the amount being withheld for the new Washington Paid Family & Medical Leave premium rate.

 

For more information regarding this update, visit PaidLeave.wa.gov.