City of Seattle Holds Public Hearing on Updated Payroll Tax Rule

By: Mackenzie Chase Posted: 06/07/2021

Your voice is important and necessary in this discussion about how employers determine their payroll tax liability

Seattle needs your input by June 16 on an updated draft rule for Seattle’s payroll expense tax, called the Jumpstart Tax. Seattle’s Department of Finance and Administrative Services (FAS) is holding a public hearing on changes to Seattle’s payroll tax rule at 10:00 a.m. on Wednesday, June 16. You can register here to watch and provide verbal comments. You can read the draft updated rule here.

The rule is being updated because in April Seattle City Council passed legislation amending the payroll tax creating a new option for employers subject to the Seattle payroll tax to determine their payroll tax liability. This option, called the “hours” method, allows employers to pay taxes on the hours an employee spent working in Seattle as a proportion of the total hours the employee worked.

  • Employers are still allowed to use the current system, called the “primarily assigned” method, where either an employee is classified as working in Seattle and an employer is responsible for paying taxes on all of the employee’s salary, or an employee is not classified as working in Seattle and no tax is due.
  • Employers will select which option they would like to use on an annual basis, which will apply to ALL of their employees - i.e., you cannot calculate the tax you owe for some employees using the “hours” method and others using the “primarily assigned” method.

If you would like to talk to staff about your concerns and questions, please contact Mackenzie Chase. We also encourage you to submit your own comments. Your voice is incredibly important and necessary in this discussion!