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Oregon Special Taxes

Overview

Oregon has several special taxes that employers must withhold or pay. This topic covers the statewide transit tax, transit district payroll taxes (TriMet and Lane County), and the Worker's Benefit Fund (WBF) assessment.

Statewide Transit Tax

On July 1, 2019, employers must start withholding the statewide transit tax (0.001 or one-tenth of 1 percent) from employees' subject wages.

Note for 2026: The statewide transit tax rate is scheduled to increase to 0.2% (0.002) for 2026. However, implementation is paused pending a voter referendum. Continue withholding at 0.1% (0.001) until further notice from Oregon DOR. Check https://www.oregon.gov/dor/programs/businesses/pages/statewide-transit-tax.aspx for updates.

Subject wages

The tax applies to:

  • Wages of Oregon residents (regardless of where the work is performed)
  • Wages of nonresidents who perform services in Oregon

Employees who aren't subject to regular income tax withholding due to high exemptions, wages below the threshold, or other factors are still subject to statewide transit tax withholding.

Self-employment income isn't subject to this tax.

How to implement transit tax in ProPay

  1. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes).
  2. Click Change on the next empty Locality field.
  3. Add OR-TRANSIT from the list box.
  4. Set the Deposit Frequency to (Q) for Quarterly.
  5. Repeat this for all employers except those exempt from this tax.

All employees will be subject to this tax for these employers. Any employees who are exempt for various reasons can be excluded via Employees > Add or Change > select the employee > Tax tab > Tax Status/Exempt.

More information

For more details, visit: https://www.oregon.gov/DOR/programs/businesses/Pages/statewide-transit-tax.aspx

Transit District Payroll Taxes

Transit district payroll taxes are imposed on the employer based on the amount of payroll. No withholding takes place from the employees' paychecks.

For more information, visit: https://www.oregon.gov/DOR/forms/FormsPubs/transit-payroll-taxes_211-503.pdf

Tri-County Metropolitan Transportation District (TriMet)

For 2026 the TriMet rate is 0.008237

How to set up TriMet tax in ProPay

ProPay comes with a local tax table already set up for this tax.

To verify the rate:

  1. Go to Client Functions > Setup > Local Tax Tables.
  2. Scroll down to OR to find this tax.
  3. Highlight it and click Edit.
  4. Check the current tax rate to ensure it's correct. If not, notify Paysoft LLC.

To set up an employer subject to this tax:

  1. Go to Payroll Functions and select a client.
  2. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes).
  3. Select OREGON for state and TRI-MET COUNTY for local-1 tax.

Lane County mass transit excise tax

For 2026 the Lane County rate is 0.0080

How to set up Lane County tax

  1. Go to Payroll Functions and select a client.
  2. Go to Employer > Employer Setup > Screen 2 (State and Local Taxes).
  3. Select OREGON for state and LANE COUNTY for local-2 tax.

Worker's Benefit Fund Assessment (cents-per-hour Rate)

The Oregon Worker's Comp tax (WBF assessment) is computed by multiplying the number of hours worked by each employee times a certain percentage rate.

For 2026 the WBF assessment rate is 1.8 cents per hour:

  • 0.9 cents is charged to the employer
  • 0.9 cents is charged to the employee

How ProPay calculates WBF

The rates are automatically built into ProPay. As long as you have selected OREGON as the TAX STATE in Employer > Employer Setup > Screen 2 (State and Local Taxes), ProPay will calculate the above tax.

For hourly employees: ProPay adds all the hours worked in a pay period and multiplies it by the tax rate.

For salaried employees: ProPay uses the following formula:

2080 work hours in a year / Divided by the number of pay periods X Times the tax rate

Example: An employee who gets paid every two weeks would be subject to:

2080 hours / 26 pay periods X 0.009 (tax rate) = $0.72 per bi-weekly pay period

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