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Before you can pay employees in a new state, you must register with the state's tax agencies. This lets you file and pay the right taxes.
🎥 Watch a quick video to learn how registering in a new state works
đź“– See our blog for full state business guides
Expand the sections below to learn more. Use CMD + F (or CTRL + F) to search for words in the article.
Let Gusto Business Compliance register your business in this state and keep you compliant after that. We'll register you with the state, act as your registered agent, file your annual reports, watch your government mail, and give you a concierge team. Learn more about Gusto Business Compliance.
Prefer not to use Business Compliance? We can still help you register in this state through our partner Middesk, with no monthly subscription. Order a one-time state tax registration.
Expand the sections below to see if you qualify, what's covered, how to sign up, and what happens next.
You can add Business Compliance if all of these are true:
You run payroll with Gusto. Business Compliance is not sold on its own.
You're on the Solo, Simple, Plus, or Premium plan. It's included with Premium at no extra cost.
Your business is a corporation or an LLC. Corporations include S corporations and nonprofit corporations. An LLC qualifies however it's taxed.
New sign-ups are not available for professional entities, including professional corporations and professional limited liability companies (PLLCs). If you already have a Business Compliance subscription as a professional entity, your coverage continues as it is.
Business Compliance is not available yet for sole proprietors, general partnerships, limited partnerships, or limited liability partnerships (LLPs). It's also not available for cannabis-related businesses, on any plan.
Not sure if you qualify? Chat with us before you sign up.
Business Compliance works state by state. Each state you add includes:
Registered agent — we accept legal and government mail for your business in that state.
Change of registered agent — we file the change so your mail comes to us.
Foreign qualification — we register your business with the Secretary of State so you can legally work there.
State tax registration — we register you with the state's tax agencies when you hire or start working there, including local tax agencies and Paid Family and Medical Leave (PFML) agencies wherever Gusto is able to register with them.
Annual report filing — we file the yearly report that keeps your business in good standing.
Government mail monitoring — we scan mail from state agencies into Gusto. Each notice comes with a plain-language summary of what it means and what to do next.
Proactive alerts — we tell you about deadlines before they're due.
You also get a compliance concierge team, no matter how many states you cover.
Cost: $85 per state, per month, billed monthly. Adding a state commits you to 12 months of coverage in that state. It's included with Premium at no extra cost. State filing fees are charged at cost, vary by state and business type, and show on your invoice.
Local tax and PFML coverage follows what Gusto's state tax registration supports, and not every agency can be registered through Gusto. Delaware and Maine do not allow a third party to register for Paid Family and Medical Leave, so you'll register with those agencies yourself. If we cannot register one of your agencies, we'll show it on your registration page under what you'll complete on your own. See Let Gusto help you with state tax registration.
Sign in to Gusto.
Go to Taxes & Compliance.
Select Business compliance.
Answer the questions about your business and the states where you work.
Review the price and what's included, then confirm.
After your first state is set up, you'll see its registrations and anything left to do.
When you add an employee or work location in a new state, that state shows up under Your states as Setup in progress, with your next step. Steps often include telling us more about your business there and moving your registered agent to us.
Select Start on a task to finish it, or View state details to see everything for that state. When every step is done, the state changes to Active.
To be your registered agent in a state, we file a change of registered agent with that state.
When a state needs this, you'll see a task on that state's card under Your states. Select Start to begin.
Keep your current registered agent until we confirm the transfer is done. A gap in coverage can put your business out of good standing in that state.
Once a state is active, we take over the ongoing work. We review your government mail, track your deadlines, and give you a concierge team to ask about any of it.
Your Business compliance page also shows your Compliance documents and Tax account details for each state.
Because we're your registered agent, legal mail for your business comes to us.
Other mail from state agencies is scanned into Agency notices on your Business compliance page. Each notice shows the state it came from, when it arrived, and a plain-language summary of what it means and what to do next. Select Unread or State to filter the list.
Still not sure what a notice means? Select Ask concierge about this mail on that notice. Your concierge team will follow up and explain what, if anything, you need to do.
If a notice is about your state payroll taxes, your concierge team brings in our tax resolution team. Learn more in How to handle a tax notice from an agency.
When you sign up, you get a compliance concierge team. They'll:
Learn about your business and the states where you work.
Check in regularly to make sure your filings are on track.
Explain any government mail you're unsure about.
Answer questions about your account.
To reach them, select Talk to a compliance concierge on your Business compliance page, or email [email protected].
We track filing and renewal deadlines for the states you cover. This includes annual reports, franchise tax filings, and business license renewals.
You'll get a notice in Gusto and by email before each deadline.
We file what we can for you. If a filing needs your approval, we'll send it to you with time to review.
Go to Taxes & Compliance → Business compliance → Manage subscription.
To stop coverage in one state, select Remove next to that state.
To cancel Business Compliance, select Leave Business Compliance.
Each state you add runs for a 12-month term, and you're billed monthly over that term. If you want to remove a state or leave Business Compliance before that term is up, email your compliance concierge team at [email protected] first. They'll tell you what happens to the rest of the term.
If Business Compliance is included with your Premium plan, you'll see a note on this page.
Before you remove a state: We'll stop being your registered agent there. Most states require one, so appoint a new agent to stay in good standing. We'll also stop tracking that state's mail and deadlines.
These services are charged separately from your subscription, on your regular Gusto invoice. Order them from your Business compliance page when you need them:
Certificate of good standing — $99 per certificate. Official proof that your business can operate and is in good standing. You may need one for a loan, a contract, or investors.
State account closure — $549 per order. We close your state tax accounts when you stop working in a state.
State filing fees are charged on top of these prices, at cost. They vary by state and by business type, so you'll see your total before you confirm the order. The filing fee appears as its own charge, separate from the service itself.
Legal and tax advice. We do not give legal or tax advice. For advice about your business, talk to a lawyer or an accountant.
Payroll taxes. Gusto payroll already handles the taxes tied to paying your team. Business Compliance covers what your business owes as a business.
Forming a new business. We register an existing business in a new state. We do not form new businesses.
Sales tax. We do not register you for sales tax or file sales tax returns.
Professional and industry licenses. We do not get or renew licenses for your profession or industry, or handle their reporting.
Reinstatements and reopened accounts. We do not reinstate a business with the Secretary of State or reopen closed payroll tax accounts.
General mail. We monitor payroll and compliance notices from government agencies, not your other mail.
Q: Why does my business need to register in a state?
A: Once you have an employee, a location, or other business in a state, that state's rules apply to you. This includes registration, filings, taxes, and renewals. It's separate from registering to run payroll there.
Q: How is this different from the payroll taxes Gusto already handles?
A: Gusto payroll handles the taxes tied to paying your team. Business Compliance covers what your business owes as a business, like Secretary of State registration, annual reports, and registered agent service.
Q: I'm already registered in my state. Do I still need this?
A: Registering is just the first step. Staying in good standing is ongoing. We keep you there by acting as your registered agent, watching your mail, filing your annual reports, and alerting you before deadlines.
Q: How much does Business Compliance cost?
A: $85 per state, per month, billed monthly. When you add a state, you are committing to 12 months of coverage in that state. It's included with Premium at no extra cost. State filing fees are charged at cost, and they vary by state and business type. One-time services are charged separately from your subscription. You'll see the price before you confirm.
Q: How do Business Compliance charges show up on my bill?
A: They appear on your regular Gusto invoice, not a separate bill. Your subscription, each one-time service you order, and state filing fees show up as their own charges, with the state named, so you can see what each one is for.
Q: I already paid for a one-time registration. What happens if I add Business Compliance?
A: Email your compliance concierge team at [email protected]. They'll review your account and share your options.
Expand the sections below to learn how to register with state agencies.
You'll work with the following Washington agencies when registering for payroll taxes. Registration must proceed in order because each agency builds on the previous registration:
Washington Department of Revenue (DOR): Handles business license registration. You'll register with this agency first. Other agency accounts will be created once this agency passes your business license information to them.
Washington State Department of Labor and Industries (L&I): Handles workers' compensation.
Washington Employment Security Department (ESD): Handles unemployment tax, Paid Family and Medical Leave (PFML), and WA Cares long-term care fund.
There are two options for registration: online (recommended) or by mail. In both cases, you'll get your account information after the agency finishes processing your application. This can take up to 12 weeks based on agency volume.
The steps required to register as a business differ depending on your business structure:
Sole proprietorships and general partnerships
File a Business License Application with the Business Licensing Service.
Corporations, limited partnerships, LLCs and LLPs
Create a business structure with the Office of the Secretary of State. Click Corporations and Charities Filing System (CCFS) to register.
Once the business structure is complete, file a Business License Application with the Business Licensing Service.
Businesses that are already licensed, but that are hiring employees for the first time
Refile a business license application with the Business Licensing Service.
The Department of Revenue will process your application and:
Notify WA Labor & Industry (L&I) to open a workers' compensation account.
Notify the Employment Security Department (ESD) to open an unemployment insurance account.
You'll receive a letter from your new Workers' Comp account manager, and a packet of information which you'll need to keep that includes:
Your Unified Business Identification (UBI)
Your ES (Employment Security) Reference Number
Your Workers' Comp Account ID
Your Participant Activation Code (PAC) for WA L&I
Note: The Department of Revenue no longer issues PAC codes. The PAC code Gusto requires will be issued by Washington L&I.
Your State Unemployment Insurance (SUI) and Employment Administration Fund rate (EAF)
The letter and packet will be sent to you once the agency finishes processing your application. This can take up to 12 weeks based on agency volume.
As a reminder, you'll also need to enter Standard Occupational Classification (SOC) codes for your employees in Washington.
Workers' Compensation insurance protects your business. It covers injuries and illness that could occur due to the work your employees do while on the job.
Washington requires employers to get coverage through a state fund. Gusto will pay this insurance premium to the state for you.
Once you've filed your business license, you can find the workers' comp rates assigned to you online.
Note: Risk class codes are different than Standard Occupational Classification (SOC) codes. SOC codes are also required for Washington employees. For more information, see Standard Occupational Classification (SOC) codes.
To get your company's risk class code rates, start by going to the Washington State Department of Labor & Industries website.
Use the dropdown to search by your company name, Workers' Comp account number, or WA UBI number and enter the information.
Choose your company name from the list of results.
Click Workers' Comp Rates.
Find your agency-assigned:
Risk Classification, and
Composite Rate (Hourly Rate), and
Employee Deduction (Employee Withholding)
Note: Gusto does not support class codes that use square footage as part of the tax calculation. For example, this includes the drywall industry.
If an employee has multiple risk class codes, you'll need to assign them a job for each code. Then, you'll edit the code for each job.
Go to People.
Click an employee's name.
From the Pay tab, find the Compensation section.
Find Risk Class Code and click edit next to that section.
Enter (or edit) the risk class code by clicking the drop-down arrow next to the code.
Use the search to find the correct code and apply it.
Click Save.
To add or update a Washington Workers' Compensation Risk Class Code rate in Gusto:
Go to Taxes & compliance.
Select Tax setup.
Scroll to Washington Tax Setup and click Manage taxes.
Find the correct Workers' Comp Risk Class and click Edit.
Scroll down and choose Add a new setting or Make a correction.
Enter the updated rate information.
Click Save.
Important: If you added an incorrect risk class code — even if it was only saved for a minute — contact Gusto through the (?) in your account so we can process the correction. We cannot automatically reverse a code once it has been saved, regardless of how long it was active. Leaving an incorrect code in place can affect your payroll calculations and filings.
If you're using the Washington Workers' Compensation Rate Notice, enter the rates as follows:
Hourly Rate: Enter the Total Hourly Rate (Employer Contribution + Employee Withholding).
Employee Withholding: Enter the Hourly Employee Withholding amount.
Once both amounts are entered, click Save.
Sole proprietors, partners and some LLCs without employees (owners only)
Private carrier coverage is not permitted
Employees based in Idaho, Montana, Nevada, North Dakota, Oregon, South Dakota, Utah, or Wyoming
Washington has deals with these states about when and how they accept their workers' compensation coverage
Some corporate officers are exempt from mandatory coverage.
Some for-hire vehicle/drivers.
Some maritime workers.
Some contractors.
Most volunteers.
Some trucking contractors.
For more information about required coverage and exemptions, see the Washington State Department of Labor & Industries workers' compensation requirements or call (360) 902-4817.
When you filed the business license application, you should have received a letter from your new Workers' Comp account manager. You also should have gotten a packet of information. It will include your unemployment rate (based on your industry).
If you're unsure about your rate, call the agency at (855) 829-9243, option 3.
If you need to run payroll and do not yet have your company's unemployment rate, just add the New employer SUI tax rate for Washington for now. Update the rate once you get it.
Rules update to expand worker protections for 2026: Washington is changing its Paid Family and Medical Leave (PFML) rules starting Jan 1, 2026. House Bill 1213 changes how employer size is counted using the average number of employees over four quarters. It also adds job protection rules for smaller businesses. In 2026, companies with 25 or more employees must follow the new job protection rules. By 2028, it will apply to companies with 8 or more employees.
After you've received your UBI account number from the state, you'll need to register for Paid Family and Medical Leave. To do this, add Paid Leave to your SAW (Secure Access Washington) portal.
If you do not have a SAW account, follow this video tutorial to get one set up.
Washington PFML offers partial wage replacement while on leave. This leave is for recovering from an illness or injury, bonding with a new child, certain military events, or caring for a sick or injured family member.
Once you've created a SAW account, add your account to the Paid Family and Medical Leave system:
Click on the Add a New Service button.
Select I would like to browse a list of services.
On the list of organizations, select Employment Security Department.
Locate Paid Family and Medical Leave and add it to your services. Click the Apply link to add it.
On the confirmation screen that lets you know the service has been added to your list, click OK.
Go back to the SAW homepage. Under your services, click Paid Family and Medical Leave to create your account.
Select Continue to be brought to the Paid Family and Medical Leave portal.
You will be prompted to create an account.
Find Employer Accounts, then click Create an Account.
Enter your 9-digit UBI (Unified Business Number) number.
If you're not sure of this number, you can reach out to the Department of Revenue. You'll likely receive an error that the UBI is not found. If that's the case, you can press Create Employer.
This will bring you to a form where you'll need to fill out the required information about your business.
After you enter your address and click Next, you'll need to upload supporting documentation. This can be either:
The Master Business Application (from the Department of Revenue) or
The business's Articles of Incorporation (from the Washington Secretary of State)
Washington's compliance team will review your request and will add the UBI number to their system.
If more information is needed, the agency will contact you. They will use the contact info you provided on the application.
Gusto withholds and pays the employee-premiums for PFML. However, employers have the option to cover some or all of their employees' PFML deductions instead of employees paying them.
Employer premium requirements depend on your company size.
Employers with fewer than 50 employees
These companies are exempt from paying the employer premium, however, the employee premium is still required.
Employers have the option to cover some or all of their employees' PFML deductions.
These companies can choose to pay the employer premiums to be eligible for WA ESD's small business grants, but this is not supported in Gusto. For more information about small business grants, see the WA PFML website.
Employers with 50 or more employees
Employers with 50 or more employees are required to pay the employer premium. Gusto can pay the employer-premium on your behalf, so long as you've let us know you're subject to the tax in your Gusto account. If you do not take any action, we will not pay employer contributions on your behalf.
Important: If you're subject to the employer premium, you must update your Gusto account each year by March 31.
How is business size determined?
Washington's Paid Leave determines your business size annually on September 30 by averaging the number of employees on your Q3 and Q4 reports from two years ago, and your Q1 and Q2 reports from last year.
For example: Your 2025 business size will be the average of employee counts from your Q3 and Q4 2023 reports, as well as Q1 and Q2 of your 2024 reports.
If your business size changes, the agency will mail the business a letter in early October to let you know.
Let Gusto know whether you're subject to PFML
Click the Taxes & compliance section and select Tax setup.
Scroll to Washington Tax Setup, and click Manage Taxes.
Click the blue edit pen and let us know you're required to pay the employer portion of WA Paid Family and Medical Leave.
If the agency calculated that you have 50 or more employees:
You'll be responsible for paying the full premium rate, including the employer share of premiums, on wages paid Jan 1–Dec 31 of the new calendar year.
If the agency calculated that you have fewer than 50 employees:
Beginning Jan 1 of the new calendar year, you will not be responsible for paying the employer share of premiums.
You may still choose to contribute the full premium rate to the program by opting in on an annual basis. The enrollment period is open until March 1.
First, a few reminders:
These settings will be applied for all employees in the state.
The settings go into effect the quarter following the one in which edits were made.
Example: If you make an edit in July (during Q3), the company will start covering employee-deductions starting October 1 (beginning of Q4).
In the meantime, you can issue non-taxable reimbursements at the end of the quarter to repay all or a part of the amount(s) deducted from employees.
These settings only apply for PFML deductions in WA.
Set the percentage of employee-deductions for PFML you'd like to cover:
Click the Taxes & compliance section and select Tax setup.
Under Washington Tax Setup, click Manage Taxes.
Under State Tax Settings, next to PFML employee portion, click the blue edit.
Enter the percentage you'd like to cover.
Click Save.
The total premium amount due each tax year can vary (up to the Social Security wage base) and is made up of both employee and company contributions. For updated rate information, see the Premium Calculator.
Use the resource(s) below to find additional information about WA PFML:
If you need to reduce your employee’s salary while they’re on PFL or PFML, schedule a compensation change in their employee profile.
State agencies or private insurance carriers handle PFL/PFML coverage and claims, depending on the state. For example, in New York, employees submit claims directly to the insurance carrier.
We are not able to advise on the amount of coverage an employee may receive.
Gusto collects WA Cares premiums from employees, just like we do for Paid Family Leave (PFML).
The WA Cares fund helps people in Washington get long-term care when they need it. Here's how it works:
Contributions: Workers in Washington will pay a small part (percentage) of their earnings.
Only employees contribute, employers do not.
Benefits: Starting in July 2026, anyone eligible can get care costing up to $36,500 (this amount will go up with inflation) over their lifetime.
Eligibility: To get the benefit, you need to meet the contribution rules and need help with daily activities.
Self-employed: If you're self-employed, you can choose to join and get the affordable WA Cares fund benefits.
If you're already registered for Paid Family Medical Leave (PFML) in Washington and have a UBI number, you do not need to register again. The Washington Employment Security Department (ESD) is working on updating their PFML platform to include WA Cares.
Employers do not contribute, employees pay 100% of the premiums through a payroll deduction. At this time, there is no wage base limit for the premiums.
Gusto will collect the employee-premiums for employees whose work is localized in WA and report employees' wages and hours. We will typically collect WA Cares premiums and file reports for the same employees who pay PFML premiums.
Eligible employees can apply for an exemption, and if approved, they must present the ESD's exemption approval letter to all current (and future) employers.
How employees apply for an exemption
The state does not know when an employee qualifies for an exemption. Your employee applies first and gives you the approval before you set anything up in Gusto.
Here is what your employee does:
Apply through ESD using a SAW account.
Get an approval letter from ESD. The letter shows the start date, which is the first day of the quarter after approval.
Give the approval letter to each of their employers.
If an employee provides you with an exemption letter, set up the exemption in Gusto.
Employees with approved exemptions are permanently ineligible to participate in the program.
If your company already supplies long-term care insurance for your employees, you still cannot apply for an exemption on behalf of employees.
Employees get to choose if they want an exemption from WA Cares coverage, or if they want to use WA Cares to supplement the benefits you're already offering.
Keep exemptions up to date
Most exemptions stay in place once the state approves them. A few depend on the employee’s situation, so the employee needs to watch for changes.
Permanent exemptions (no action needed)
Veterans with a 70% or higher service-connected disability. This exemption never expires.
Employees with private long-term care insurance. This exemption never expires.
Conditional exemptions (the employee watches for changes)
Out-of-state residents
Military spouses or domestic partners
Non-immigrant visa holders. Starting January 1, 2026, these employees are exempt on their own unless they opt in.
If an employee stops qualifying, they must tell ESD and their employer within 90 days. For example:
An out-of-state resident moves to Washington.
A military spouse’s partner leaves the service.
A visa holder becomes a permanent resident.
If the employee misses the 90-day window, they owe the unpaid premiums plus 1% interest each month.
All full-time and part-time employees are eligible to participate in the program, unless they've received an approved exemption letter.
In addition to living out of state, a few other conditions make somebody working in WA eligible for exemption from WA Cares.
WA Cares is long-term care, which consists of help with daily activities like bathing, eating, dressing, taking medications, and assistance in the bathroom. Long-term care is not the same as medical care and is not covered by health insurance or PFML.
Gusto does not support optional coverage for self-employed owners yet. If you opt in with the state, you report your earnings and pay premiums yourself through the state portal. We do not deduct or pay this coverage for you. The steps below show how to opt in directly with Washington.
Some business owners count as self-employed for PFML and WA Cares. If you are self-employed, these programs are optional. You choose whether to join.
A few things to know first:
You opt into each program on your own, with the state. You can join PFML, WA Cares, or both. Joining one does not join you to the other.
Wait to change any coverage settings in Gusto until after you opt in with the state.
Check whether you count as self-employed
Business type
Self-employed for PFML and WA Cares?
What this means in Gusto
Corporation (C-corp or S-corp)
No. Shareholders count as employees.
Keep PFML and WA Cares active. Shareholders are already covered as employees, so leave the exemption off.
LLC (single or multi-member), LLC taxed as an S-corp, or LLC taxed as a C-corp
Yes. Members count as self-employed.
Coverage is optional. If you opt in with the state, report your earnings and pay premiums through the state portal.
Sources: Washington PFML elective coverage and WA Cares opt-in.
How to opt in with the state
Go to SecureAccess Washington (SAW) and sign in. Create an account first if you need one.
Add the Paid Family and Medical Leave service.
Select Elect Coverage as Self-Employed.
Choose your program or programs: PFML, WA Cares, or both. Each one is a separate choice.
Your coverage starts on the first day of the quarter after you elect. For example, if you opt in during Q3 (July through September), coverage starts October 1.
After you opt in, report your earnings and pay premiums each quarter through SAW. We do not file or pay this coverage for you.
Renewals and withdrawals are different for each program
PFML: When you opt in, you commit for at least 3 years. After that, your coverage renews each year on its own. You can withdraw within 30 days after each coverage period ends. You do not need to opt in again each year.
WA Cares: No renewal is needed, and your coverage does not expire. Once you opt in, you cannot withdraw. You keep paying premiums until you retire or you are no longer self-employed. To stop, file a notice with ESD that you retired or are no longer self-employed.
Once you complete registration with all state agencies, take these steps:
If your business is a corporation, report any corporate officers.
If you've already registered in Washington, you need to enter your tax account details in Gusto. You need to be registered with one or more of the following agencies for Gusto to file and pay taxes on your behalf:
Washington Department of Revenue (DOR): Handles business license registration.
Washington State Department of Labor and Industries (L&I): Handles workers' compensation.
Washington Employment Security Department (ESD): Handles unemployment tax, Paid Family and Medical Leave (PFML), and WA Cares long-term care fund.
If you still need to register, see the Register for WA business license, workers' compensation, unemployment tax, Paid Family and Medical Leave (PFML), and WA Cares on your own section earlier in this article.
Once you add a valid Washington work address in Gusto for one or more employees, you can enter your state tax account information.
Go to Taxes & compliance, then select Tax setup.
Find Washington Tax Setup and select Manage taxes.
Enter your:
ES Reference number
Unified Business ID
Workers' Comp Account ID
Once you've entered your Washington L&I account number in Gusto, we'll create a third-party authorization (TPA) form you'll need to sign.
Participation activation code
SUI tax rate. Do not include the EAF rate when entering your rate in Gusto.
Include all other lines (such as social cost) from the SUI rate notice.
You'll also need to enter Standard Occupational Classification (SOC) codes for your employees in Washington.
Important: If you edit a tax account number after payments or filings have already been made, there may be tax implications. Learn how to pull reports in Gusto that can help you correct any historical tax issues related to tax account number updates.
Existing businesses can search their UBI account number on the Washington Department of Revenue website.
Click Look up a business under the I want to... section.
Enter your company name and click Search.
UBI numbers typically start with a 6.
If you've run payroll in Washington in the past, you can find your ESD account numbers on the Quarterly Tax and Wage Detail Reports (form 5208 A).
You can also find both your ESD and UBI numbers on your "annual tax rate" notice from the Employment Security Department.
If you do not know your account numbers, call the ESD at (360) 890-3500.
You can find your unemployment account number and rate by:
Checking the notice you receive from the Washington Employment Security Department each year, or
Calling the agency at (855) 829-9243.
Note: Do not include the EAF rate when entering your rate in Gusto. Include all other lines (such as social cost) from the SUI rate notice.
As a reminder, you'll also need to enter Standard Occupational Classification (SOC) codes for your employees in Washington.
You can find your account number by logging into your WA L&I account.
This agency is separate from WA Employment Security.
Once you've entered your Washington L&I account number in Gusto, we'll generate a third-party authorization (TPA) form you'll need to sign.
Without the required third party authorization (TPA), we are unable to file your tax returns to WA L&I. This means if you're coming to Gusto from another payroll provider, you'll need to transfer third party authorization (TPA) to Gusto. To do so:
Go to Documents
Under Company, click Authorizations.
E-sign the applicable WA authorization form.
Employers are assigned a Participation Activation Code (PAC) for their Workers' Comp Insurance. You can find the PAC on your Workers' Comp "new account letter" and "annual rate notice."
The PAC number is a 3 to 8-digit number. If you do not know your number, contact the Washington L&I agency at (360) 902-4817.
To get your company's assigned risk class code rates, start by visiting the Washington State Department of Labor & Industries website.
Use the dropdown to search by your company name, Workers' Comp account number, or WA UBI number and enter the information.
Choose your company name from the list of results.
Click Workers' Comp Rates.
Find your agency-assigned Risk Classification, Composite Rate (Hourly Rate) and Employee Deduction (Employee Withholding).
Note: Gusto does not support class codes that use square footage as part of the tax calculation. For example, this includes the drywall industry.
If you're a corporation in Washington, you have to report all corporate officers who do not have unemployment insurance (are exempt) and are not set up as employees on payroll. This means their wages are not included in the unemployment insurance quarterly reports.
At the end of each quarter, Gusto will ask you to complete a to-do item on your Home page so we can comply with this requirement. Below are the two questions you'll see:
Number of corporate officers: #
Officer earnings and stock options: $
Corporate officers are all officers, including those not listed in Gusto, who are exempt from Washington state unemployment tax and are not already being reported on the quarterly Washington UI Tax and Wage Report.
Officer earnings are the combined wages or earnings for all non-covered corporate officers.
Visit the Washington State Employment Security Department corporate officers FAQ to learn more about how to define a corporate officer and the law on unemployment-insurance coverage for corporate officers. You can also contact the ESD at (855) 829-9243.
If the number of officers or officer earnings have previously been misreported on any quarterly reports, you can amend this portion of the filing by following the directions below.
Email [email protected] with the following information:
The quarterly filing that needs correcting. For example, Q1 2017.
The correct number of officers
The correct amount of officer earnings and stock options for that quarter
Request that only the corporate officer section of the filing be amended.
You can follow up with your request by contacting the Employment Security Department's accounting unit directly at [email protected].
Learn more about the Seattle Payroll Expense Tax and Additional Payroll Expense Tax below.
Note: Gusto does not support either of these taxes right now, but we will keep an eye on how it affects our customers and may review our decision in the future.
Beginning Jan 1, 2021 through Dec 31, 2040, employers doing business in the city of Seattle may be subject to a payroll expense tax. Learn more below.
Note: Gusto does not support this tax but we will continue to monitor the impact to our customers and reassess the decision in the years to come.
This is an employer-paid tax on the "payroll expense" of the business, meaning the compensation paid to employees in Seattle.
Learn more below about how compensation totals are determined.
The payroll expense tax is a tax that businesses have to pay, not the employees. This means the employer pays the tax, and it is not taken out of employees' paychecks. The law specifically states employers cannot withhold the tax from their employees.
To see if you're required to pay this tax, go to Seattle's City Finance website.
There's an exemption if the prior year's compensation paid to Seattle employees was under an annual dollar amount. Learn more in the section below about what should be included in compensation calculations.
For example: If you want to know if a company is subject to the tax in 2025, you'll need to pull and calculate the 2024 compensation paid to Seattle employees to determine if the company has met the payroll expense threshold.
If you're subject to the tax (based on your prior year's compensation data), the next step is to use the current year's compensation paid in Seattle to determine the payroll expense tax due for the new calendar year.
For this tax, compensation has the same meaning as it does for the WA Family and Medical Leave program.
The total payroll expense for employees in Seattle paid at or above the annual compensation limit, starting with the first dollar paid, must be included in the amount subject to the payroll expense tax.
Compensation calculations include:
The standard gross compensation paid to the Seattle employee
All payments for personal services
Commissions and bonuses
The cash value of all earnings paid in any medium other than cash
Employee contributions to deferred compensation plans. For example, 401(k), 403(b), or other deferred compensation plans in which a portion of an employee's salary or wages are set aside to be paid at a later date.
Compensation does not include:
Tips
Supplemental benefit payments made by an employer to an employee in addition to any paid family or medical leave benefits received by the employee
Employee exercised stock options. This includes incentive stock options (ISOs) or non-qualified stock options (NQSOs).
Payments provided to cover a past or future cost incurred by the employee as a result of the employee's expected job functions
Employer contributions into retirement or disability plans
Payments to an owner of a pass-through entity that are not earned for services rendered or work performed. This means return of capital, investment income, or other passive activities.
You can build a custom report in Gusto using the instructions found in this article to help with finding annual compensation totals.
View the current tax rate in this chart.
Apr 30
For the quarter ending March 31
Jul 31
For the quarter ending June 30
Oct 31
For the quarter ending Sep 30
Jan 31
For the quarter ending Dec 31
Register for a Seattle business license tax certificate if you have not already done so.
Anyone doing business in Seattle must have the above certificate. Additional information about the Seattle business license tax can be found on the Seattle City Finance website's business license cost page.
If you want to register and file manually, Payroll Expense Tax forms will be available to download from the website.
Manual forms can be completed and mailed to the address provided on the back of the form. Returns are not deemed filed until both tax filing and payment are received.
Sign in to the city of Seattle's online tax portal FileLocal.
Make sure you have your customer number that was assigned to the business when you registered. You can find this on the business license tax certificate.
Use your customer number to file and pay online.
If you're filing manually, include the customer number as well as legal name and address on the filed form.
If you have questions about this process, contact the agency directly at (877) 693-4435 or by email at [email protected].
Create a Preparer Account in FileLocal to file returns on behalf of your client. The client will need to grant you permission to file their returns in FileLocal.
Check out the Seattle Department of Finance and Administrative Services Payroll Expense tax updates.
Seattle residents voted to approve Proposition 1A, adding a 5% payroll expense tax on annual compensation over $1 million paid to an individual employee.
Note: Gusto does not support this tax right now, but we will keep an eye on how it affects our customers and may review our decision in the future.
This tax applies only to Seattle businesses and excludes independent contractors.
The tax, effective Jan 1, 2025, will fund housing development and maintenance in the city.
This tax is separate from the existing Seattle payroll expense tax enacted in 2021.
Note: As a reminder, Gusto does not support this tax right now, but we will keep an eye on how it affects our customers and may review our decision in the future.
If you have any employees with compensation over $1 million, follow the steps in the Seattle Payroll Expense Tax section earlier in this article to learn how to file and pay the tax.
Use this list to find Washington's tax forms and where to view each one.
Employer's Quarterly Tax and Wage Detail Report
Labor & Industries Employer's Quarterly Report
Employer's Paid Family & Medical Leave and WA Cares Quarterly Wages and Hour Report
Washington reports Paid Family & Medical Leave and WA Cares premiums on the same quarterly report, so you will not see a separate WA Cares filing.
New Hire Report
To view these forms, go to Taxes & compliance, then Tax documents, and select the State tab.
To see what we've paid for you, run the Agency payments report.
Use this list to reach Washington's payroll tax agencies by phone or website. Washington has no state income tax withholding, so this covers unemployment insurance, workers' compensation, and paid family and medical leave.
Phone numbers and links can change. If one does not work, search the agency's official website for the latest contact info.
Unemployment insurance — Washington Employment Security Department (ESD): (855) 829-9243
Workers' compensation — Washington Department of Labor and Industries (L&I): (360) 902-5800
Paid family and medical leave — Washington Paid Family and Medical Leave: (833) 717-2273
Learn how to close or reopen tax accounts.