Oregon State Income Tax Withholding
Last Updated: January 2026
Overview
Oregon uses a progressive income tax system with four tax brackets. Oregon has no sales tax, making income tax the primary revenue source. The state has additional payroll taxes including transit taxes and paid family leave contributions.
2026 Tax Rates
Single Filers
| Taxable Income | Tax Rate |
|---|---|
| $0 - $4,300 | 4.75% |
| $4,301 - $10,750 | 6.75% |
| $10,751 - $125,000 | 8.75% |
| Over $125,000 | 9.90% |
Married Filing Jointly
| Taxable Income | Tax Rate |
|---|---|
| $0 - $8,600 | 4.75% |
| $8,601 - $21,500 | 6.75% |
| $21,501 - $250,000 | 8.75% |
| Over $250,000 | 9.90% |
Top Marginal Rate: 9.9% (one of the highest in the nation)
Deductions and Exemptions
- Standard Deduction (Single): $2,835
- Standard Deduction (Married Filing Jointly): $5,670
- Personal Exemption Credit: $236 per exemption (phases out at higher incomes)
Additional Payroll Taxes
Statewide Transit Tax (2026)
- Rate: 0.1% (0.001) of wages
- Purpose: Funds public transportation
- Withholding: Employers must withhold from all employees working in Oregon
Paid Family and Medical Leave (PFML) - 2026
- Total Rate: 1.0% on wages up to $168,600
- Employee Portion: 0.6%
- Employer Portion: 0.4%
- Wage Base: $168,600 (2026)
Note: Employers with fewer than 25 employees are not required to pay the employer portion but must still withhold employee contributions.
Special Considerations
- Form OR-W-4: Oregon REQUIRES employees to complete Form OR-W-4 (Oregon does not accept federal Form W-4)
- Federal Tax Subtraction: Oregon allows a subtraction for federal income tax paid (up to $8,500 for 2026). ProPay applies this subtraction automatically. The subtraction phases out for higher-income taxpayers.
- No Local Income Taxes: Unlike Ohio, Oregon municipalities do not levy local income taxes
- Arts Tax: Portland Metro area has a $35 annual arts tax (not withheld from payroll)
- Tri-Met/Lane Transit Taxes: Additional transit district taxes apply in Portland and Lane County areas
Reciprocal Agreements
Oregon has no reciprocal tax agreements with other states.