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Oregon Paid Leave

Overview

Oregon Paid Leave is a state program that provides paid time off for eligible employees in Oregon. The program is funded by contributions from both employees and employers, with costs shared based on employer size.

Note: Oregon Paid Leave contribution rates and wage ceilings are updated annually. Always verify current rates at the start of each calendar year.

2026 Contribution Rates

Total contribution rate: 1.0% of eligible wages Employee rate: 0.60% Employer rate: 0.40% (for employers with 25 or more employees) Wage ceiling: $184,500 (Social Security taxable maximum for 2026)

Cost Sharing by Employer Size

Employer Size Employee Pays Employer Pays Total
25+ employees 60% (0.60%) 40% (0.40%) 1.0%
Fewer than 25 employees 60% (0.60%) 0% 0.60%

Eligibility

Employers with 25 or More Employees

If your business employs 25 or more employees:

  • You must participate and pay into the program
  • You pay 40% of the contribution (0.40%)
  • Your employees pay 60% (0.60%)
  • Both contributions are withheld from payroll

Small Employers (Fewer Than 25 Employees)

If you have fewer than 25 employees:

  • You are not required to make employer payments
  • You must collect and submit employee contributions (0.60%)
  • Employees pay the full contribution they owe

The employee count is based on the number of employees during the previous calendar year.

All Employees

All employees working in Oregon pay into the program, including:

  • Full-time employees
  • Part-time employees
  • Seasonal employees
  • Employees working for multiple employers

Setting Up Oregon Paid Leave in ProPay

Oregon Paid Leave is managed through ProPay's Local Taxes option.

For Employers with Fewer Than 25 Employees (Last Year)

  1. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes).
  2. Add one locality: OR-PDLEAVE-EE.
  3. Click Save.

This configuration will:

  • Deduct the employee portion (0.60%) from paychecks
  • Not calculate employer contributions

For Employers with 25 or More Employees (Last Year)

  1. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes).
  2. Add two localities:
    • OR-PDLEAVE-EE (employee portion)
    • OR-PDLEAVE-ER (employer portion)
    1. Click Save.

    This configuration will:

    • Deduct the employee portion (0.60%) from paychecks
    • Accrue the employer portion (0.40%) as a liability

    How Oregon Paid Leave is Calculated

    ProPay calculates Oregon Paid Leave premiums using the following method:

    1. Calculate gross pay for the paycheck
    2. Deduct non-taxable items: Subtract any paytypes marked as:
      • (I)nc D)ded type: D, M, or I
      • W-2-box type: U (for unearned income)
      1. Apply the Paid Leave rate to the adjusted gross wages
      2. Cap at wage ceiling: Contributions stop when employee wages exceed the annual wage ceiling ($184,500 for 2026)

      Setting Up Rates in ProPay

      ProPay pre-programs the Oregon Paid Leave rates annually. To verify or update rates:

      Local Tax Rate Setup

      1. Go to Client Functions > Setup > Local Tax Rate Setup.
      2. Verify the following rates are configured:

      For OR-PDLEAVE-EE (Employee):

      • Rate: 0.60%
      • Wage ceiling: $184,500 (for 2026)

      For OR-PDLEAVE-ER (Employer):

      • Rate: 0.40%
      • Wage ceiling: $184,500 (for 2026)

      Note: The wage ceiling matches the Social Security taxable maximum and is adjusted annually.

      Reporting and Remittance

      Oregon employers must report and remit Paid Leave contributions quarterly through the Oregon Employment Department's online portal.

      Quarterly Due Dates:

      Quarter Period Due Date
      1st Quarter January - March April 30
      2nd Quarter April - June July 31
      3rd Quarter July - September October 31
      4th Quarter October - December January 31

      Troubleshooting

      Oregon Paid Leave Not Calculating

      Solution:

      1. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes) and verify the correct localities are added:
        • Small employers: OR-PDLEAVE-EE
        • Large employers: OR-PDLEAVE-EE and OR-PDLEAVE-ER
        1. Go to Client Functions > Setup > Local Tax Rate Setup and check that the local tax rates are correctly set
        2. Ensure the wage ceiling is properly configured for the current year ($184,500 for 2026)
        3. Verify the employee's wages are subject to Oregon withholding

        Incorrect Contribution Amounts

        Solution:

        1. Confirm the current year's contribution rates:
          • Employee: 0.60%
          • Employer: 0.40% (only for employers with 25+ employees)
          1. Check that contributions stop at the wage ceiling ($184,500 for 2026)
          2. Verify you're using the correct employer size category based on last year's employee count
          3. Ensure non-taxable paytypes are properly configured (D, M, or I with W-2-box type U)

          Employer Portion Not Accruing

          Solution:

          1. Verify the employer had 25 or more employees in the previous calendar year
          2. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes) and confirm that both localities are added:
            • OR-PDLEAVE-EE
            • OR-PDLEAVE-ER
            1. Go to Client Functions > Setup > Local Tax Rate Setup and check that the OR-PDLEAVE-ER rate is set to 0.40%
            2. If you recently crossed the 25-employee threshold, update your setup accordingly

            Employee Asking About Paid Leave Deductions

            Solution:

            1. Explain that Oregon Paid Leave provides paid time off for family and medical leave
            2. Note that employees pay 60% of the contribution (0.60% of wages)
            3. Direct employees to https://paidleave.oregon.gov for benefit information
            4. Provide paycheck stubs showing the Paid Leave deduction

            Frequently Asked Questions

            Q: When did Oregon Paid Leave contributions begin? A: Contributions began on January 1, 2023. Benefits became available starting September 3, 2023.

            Q: Do all employers have to pay the employer portion? A: No. Only employers with 25 or more employees in the previous calendar year must pay the employer portion (0.40%). Small employers must still withhold and remit the employee portion.

            Q: What is the maximum annual contribution? A: For 2026, the maximum is $1,845 per employee (1.0% of $184,500). Employees pay $1,107 (0.60%) and large employers pay $738 (0.40%).

            Q: Can employers pay the employee portion? A: Yes, employers may voluntarily pay all or part of the employee contribution, but this is not required.

            Q: What if an employee works in multiple states? A: Oregon Paid Leave applies to wages earned for work performed in Oregon. For multi-state employees, consult with a payroll tax professional.

            Q: Are there exemptions from Oregon Paid Leave? A: Limited exemptions exist. Self-employed individuals may opt in voluntarily. Employers with approved equivalent plans may apply for exemption. Visit https://paidleave.oregon.gov for exemption details.

            Additional Resources

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