Quick Answer
Running payroll in Oregon means stacking a federal EIN on top of three state registrations: withholding with the Oregon Department of Revenue, SUI and Paid Leave Oregon with the Oregon Employment Department, and new hire reports with the Oregon Child Support Program. Set a payday no more than 35 days apart, withhold using Form OR-W-4, and budget for the statewide transit tax alongside federal deposits.
Last reviewed: July 2026
Table of Contents
Oregon employers answer to more agencies than most. Between state income tax, unemployment insurance, Paid Leave Oregon, and the statewide transit tax, a first payroll run touches at least four separate accounts before a single paycheck goes out. None of it is complicated on its own. The trouble comes from skipping a step and discovering the gap during an audit. Work through the order below and you will have every account open before you owe anything.
Step 1: Get Your Federal EIN
Your Employer Identification Number is the anchor for every registration that follows, including your Oregon accounts, your business bank account, and federal tax filings. Apply free at IRS.gov and you'll have the number in minutes if you apply online during business hours.
Step 2: Register With Oregon's Agencies
Once your EIN is in hand, open three Oregon accounts. The Oregon Department of Revenue issues your state withholding account and Business Identification Number, used on every state tax filing you submit. The Oregon Employment Department handles both your SUI account and your Paid Leave Oregon reporting through one combined quarterly filing. New hires get reported separately, to the Oregon Child Support Program, within 20 days of the hire date.
Two obligations catch new employers off guard. Paid Leave Oregon requires a combined 1% contribution on wages, split 60/40 between employer and employee at businesses with 25 or more workers; smaller employers only need to withhold the employee share unless they opt in voluntarily. Separately, nearly every Oregon employer must withhold the statewide transit tax, a flat 0.1% of wages that funds public transportation and gets remitted alongside your regular state withholding deposits. Neither shows up on a federal checklist, so build both into your setup from day one.
Step 3: Set Up State Withholding
Have every employee complete Form OR-W-4, the Oregon Withholding Statement and Exemption Certificate, at hire. Oregon's graduated income tax brackets and credits diverge enough from federal law that the federal W-4 alone will not calculate accurate state withholding. Pull the current withholding tables from the Department of Revenue each January, since brackets adjust annually and using last year's tables under-withholds. If any of your workers live or work inside the Portland metro boundary or Multnomah County, check whether local income taxes apply on top of state withholding once their pay crosses the income thresholds those programs set.
Step 4: Register for SUI
New Oregon employers start at a SUI rate of 2.4% on the first $56,700 of each employee's wages in 2026. After your business has enough payroll history, typically a few years, the Oregon Employment Department reassigns your rate somewhere between 0.9% and 5.4% based on claims filed against your account. Combined reporting means one quarterly form covers SUI and Paid Leave Oregon together, so keep wage records that separate the two contributions cleanly from the start rather than reconstructing them later.
Step 5: Pick a Pay Frequency and Learn Final Pay Rules
Oregon law does not force a specific pay frequency. It requires a regular, established payday and caps the gap between paydays at 35 days under ORS 652.120. Most small employers land on semimonthly or biweekly schedules because they line up cleanly with monthly budgeting, but weekly works too if that suits your business.
Final pay is where Oregon gets strict. A discharged employee must be paid by the end of the next business day. An employee who resigns with at least 48 hours notice is owed final wages on the last day worked, and one who resigns with less notice must be paid by the next regular payday. Miss the discharge deadline and Oregon BOLI can assess penalty wages for every day the payment is late, so build final-pay processing into your termination checklist rather than treating it as an afterthought.
Step 6: Deposit and Filing Calendar
State withholding deposit frequency scales with how much you withhold annually: quarterly for small amounts, monthly once you cross $500 a year, and semi-weekly once withholding tops $10,000 annually. SUI and Paid Leave Oregon combined reports are due quarterly, on the last day of the month following each quarter's end. On the federal side, Form 941 is due quarterly as well, and federal deposit timing follows the same monthly-or-semiweekly split based on your lookback-period liability. Our Form 941 guide walks through that federal side in more detail. Run every paycheck through the paycheck calculator before your first live payroll so withholding and net pay match what your software produces.
Step 7: Year-End W-2s
Employees need their W-2 by January 31 following the tax year, and Oregon requires a copy of the same information filed with the Department of Revenue on a similar timeline. Reconcile your quarterly 941s and Oregon combined reports against your annual totals before you file W-2s. Catching a mismatch in January is a quick fix; catching it after the state does is not. If any employee's OR-W-4 elections look off going into the new year, point them to our W-4 helper so their withholding matches their actual situation for next year.
Frequently Asked Questions
What are the first steps to running payroll in Oregon?
Get a federal EIN from the IRS, register with the Oregon Department of Revenue for state withholding, register with the Oregon Employment Department for SUI and Paid Leave Oregon, and set a compliant pay schedule before your first payroll runs.
Which form do Oregon employers use for state withholding?
Oregon employers use Form OR-W-4, the Oregon Withholding Statement and Exemption Certificate. Every employee should complete one on hire, since Oregon's brackets and credits differ from the federal W-4.
How often must Oregon employers pay employees?
Oregon law requires a regular, established payday with no more than 35 days between paychecks. Most small employers choose semimonthly or biweekly schedules, though neither is legally mandatory as long as the 35-day cap is met.
What is the 2026 SUI new employer rate in Oregon?
New Oregon employers pay a SUI rate of 2.4% on the first $56,700 of each employee's wages in 2026. After a few years of claims history, the Oregon Employment Department reassigns an experience rate between 0.9% and 5.4%.
Let Software Handle the Moving Parts
Oregon payroll has more accounts to track than most states: withholding, SUI, Paid Leave Oregon, the transit tax, and sometimes local Portland taxes on top. Gusto calculates and files all of it automatically, deposits on schedule, and flags Oregon's next-business-day final pay rule before you miss it.
Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of the date noted above and may not reflect recent changes in federal or Oregon state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with Oregon law before making payroll or compliance decisions for your business.