Oregon Payroll Compliance Guide 2026

Oregon ranks among the most complex payroll states outside of California and New York. The combination of high income taxes, a statewide paid leave program with shared employer-employee contributions, geographic minimum wage tiers, local Portland metro taxes, and BOLI's active enforcement posture means that getting Oregon payroll right requires careful setup from the start. This guide covers every Oregon employer payroll obligation for 2026.

Oregon Payroll Obligations at a Glance

State Unemployment Insurance (SUI)

Oregon's unemployment insurance is administered by the Oregon Employment Department. SUI is employer-paid; employees do not contribute to Oregon UI.

SUI Rates for 2026

• New employer rate: 2.1%
• Experienced employer range: 0.9% to 5.4%
• Taxable wage base: $54,300 per employee per calendar year
• Maximum annual SUI cost per employee: $2,932.20 (at 5.4%)
• New employer annual cost per employee: $1,140.30 (at 2.1%)

Oregon's $54,300 wage base is among the highest in the country. Even at the low end of the experience rate range (0.9%), an employer pays $488.70 per employee annually. At the new employer rate of 2.1%, that's over $1,100 per employee. Oregon employers must budget SUI as a significant labor cost line item compared to states with $7,000–$15,000 wage bases.

State Income Tax Withholding

Oregon has one of the highest state income tax burdens in the country. The Oregon Department of Revenue administers a graduated four-bracket system topping out at 9.9%.

2026 Oregon Income Tax Brackets (Single Filers)

Married filing jointly brackets are approximately double the single brackets. Even at moderate income levels, Oregon employees face 8.75% marginal rates. Employers withhold based on Form OR-W-4 and Oregon withholding tables published by the Oregon Department of Revenue. Update tables each January.

Portland Metro and Multnomah County Taxes

Employers with workers in the Portland metro area face two additional local taxes beyond state income tax:

Metro Supportive Housing Services Tax

Metro (the Portland regional government) imposes a 1% income tax on individuals earning over $125,000 (single) or $200,000 (joint) living or working in the Metro area. Employers must withhold this tax for employees meeting the threshold and who work in Clackamas, Multnomah, or Washington counties. The Metro tax is an employee cost; employers withhold and remit it. Employers with workers in the Metro boundary must register with Metro and file quarterly returns.

Multnomah County Preschool for All Tax

Multnomah County imposes an additional income tax for preschool funding: 1.5% on income over $125,000 (single) / $200,000 (joint), plus 1.5% on income over $250,000 (single) / $400,000 (joint). Employers with workers residing in Multnomah County must withhold this tax for eligible employees. This is separate from the Metro tax and requires separate registration with Multnomah County.

Oregon Paid Leave

Oregon Paid Leave (administered by the Oregon Employment Department) launched September 3, 2023. It requires contributions from both employers and employees.

Contribution Rates and Employer Size

Contributions are assessed on wages up to the Social Security wage base ($176,100 in 2026). Employers withhold the employee portion from each paycheck and remit the combined contribution quarterly to the Oregon Employment Department.

Benefits

• Up to 12 weeks of paid leave per benefit year for family, medical, or safe leave
• Up to 14 weeks total if pregnancy-related leave is combined with family leave
• Benefit amount: 60% of wages up to 120% of Oregon average weekly wage; higher replacement rates for lower-wage workers
• Leave may be taken intermittently or in one block

Employer Responsibilities

• Post required notices about Oregon Paid Leave rights
• Withhold employee contributions and remit quarterly
• Maintain job protection for employees on leave (employees at employers with 25+ workers)
• File quarterly combined payroll reports with Oregon Employment Department

Oregon Minimum Wage 2026

Oregon operates a three-tier minimum wage system based on geography. All three rates are indexed to the CPI and adjust on July 1 each year:

Determine which zone each of your work locations falls in before July 1. The Oregon Bureau of Labor and Industries (BOLI) publishes maps and county lists for zone assignments. Rates update annually; confirm rates each June before July 1 takes effect.

Tipped Employees

Oregon does not allow a tip credit. All employees, including tipped workers, must receive the applicable zone minimum wage in cash wages regardless of tips received. This differs significantly from states that allow $2.13/hr tipped minimum wages. Oregon restaurant and hospitality employers face the full $14.70 or $15.95 cash wage obligation.

Pay Frequency and Final Paycheck Rules

Pay Frequency

Oregon requires employers to pay wages at least twice per month (semi-monthly). More frequent schedules are permissible. Paydays must be designated and posted. Wages must be paid in full on the designated payday.

Final Paycheck — Oregon's Strict Rules

Oregon has some of the tightest final paycheck rules in the country, with different deadlines depending on the circumstances of separation:

• Involuntary discharge (fired or laid off): Final wages are due by the end of the next business day
• Employee resignation with at least 48 hours notice: Final wages are due on the last day of work
• Employee resignation with less than 48 hours notice: Final wages are due by the next regular payday (but no more than 5 business days after the last day)

Oregon BOLI Enforcement

The Oregon Bureau of Labor and Industries (BOLI) enforces Oregon wage and hour laws, and it does so actively. BOLI investigates wage claims filed by employees, conducts employer audits, and can assess penalty wages, damages, and civil penalties.

BOLI's wage claim process allows employees to file complaints online. BOLI will investigate and contact the employer. If BOLI finds a violation, it can order back wages, penalty wages (for late final pay), and civil penalties. BOLI also enforces Oregon's equal pay law, predictive scheduling requirements (for covered employers), and earned sick time rules.

Oregon employers should maintain accurate, contemporaneous payroll records including time records for hourly employees, wage rates, pay stubs, and withholding documentation. BOLI can audit records going back several years. Good records are your primary defense in any BOLI investigation.

New Hire Reporting

Oregon employers must report all new hires and rehires to the Oregon New Hire Reporting Program within 20 days of the hire date. Reports include employee name, address, SSN, date of hire, employer name, address, and EIN. Submit at newhire.emp.state.or.us or by mail. Multistate employers may report through the federal portal at acf.hhs.gov.

Employer Registration in Oregon

Oregon Department of Revenue — Withholding Account

Register at the Oregon Revenue Online system (revenue.oregon.gov) for your state income tax withholding account. You receive an Oregon BIN (Business Identification Number) used on all state tax filings.

Oregon Employment Department — SUI and Paid Leave

Register with the Oregon Employment Department for both SUI and Oregon Paid Leave. Oregon uses a combined reporting system; one quarterly report covers both programs. Register at oregon.gov/employ.

Metro and Multnomah County (if applicable)

Portland-area employers register separately with Metro (oregonmetro.gov) and Multnomah County (multco.us) for local income tax withholding if employees meet the income thresholds.

Filing Schedules and Deadlines

State Withholding

SUI and Oregon Paid Leave — Quarterly

Federal Payroll Taxes

• Social Security (OASDI): 6.2% employer + 6.2% employee on wages up to $176,100 (2026)
• Medicare: 1.45% employer + 1.45% employee on all wages; 0.9% Additional Medicare Tax on wages over $200,000
• FUTA: 6.0% on first $7,000 per employee, reduced to 0.6% with the full Oregon SUI credit
• Federal income tax withholding: Based on each employee's W-4
• Form 941: Quarterly federal payroll tax return, due April 30, July 31, October 31, and January 31

Frequently Asked Questions

How does Oregon Paid Leave affect small employers?

Employers with fewer than 25 employees are exempt from the employer portion of the Oregon Paid Leave contribution. Small employers only withhold and remit the employee portion (0.6% of wages up to the Social Security wage base). The employer can voluntarily contribute the employer's share to help employees access benefits sooner if their hours are limited, but it is not required. Small employers still must post notices and follow leave administration rules.

What is Oregon's SUI wage base?

Oregon's SUI taxable wage base is $54,300 per employee per year — one of the highest in the country. At the new employer rate of 2.1%, annual SUI cost per employee is $1,140.30. The wage base increases nearly every year as it is tied to average wages.

What are Oregon's minimum wage zones?

Oregon has three minimum wage tiers: $15.95/hr in the Portland metro area, $14.70/hr standard (most counties), and $13.70/hr in designated non-urban counties. Rates adjust on July 1 each year. Oregon does not allow a tip credit — all employees must receive the full zone minimum wage in cash.

What is the Oregon final paycheck deadline for terminated employees?

Employees who are discharged must receive their final paycheck by the end of the next business day. Missing this deadline triggers Oregon BOLI penalty wages of 8 hours of the employee's regular daily rate per day late, for up to 30 days. Build same-day or next-business-day processing into all termination procedures.

What are Oregon's income tax rates?

Oregon taxes wages at graduated rates from 4.75% to 9.9%. The 9.9% rate applies to income above $250,000 for single filers. Portland metro and Multnomah County residents with higher incomes face additional local taxes on top of state rates.

What is Oregon BOLI and why does it matter?

Oregon BOLI (Bureau of Labor and Industries) enforces Oregon wage and hour laws, including minimum wage, overtime, final paycheck rules, and equal pay. BOLI investigates employee wage claims and can audit employer records. Penalty wages for late final paychecks can reach thousands of dollars per employee. BOLI enforcement in Oregon is more active than in most states — accurate records and strict deadline compliance are not optional.