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New company registration in Washington

Washington Tax Agencies

  • Washington Department of Revenue - business license
  • Washington Employment Security Department (ESD) - unemployment tax and Paid Family and Medical Leave
  • Washington State Department of Labor and Industries (L&I) - Worker’s Compensation

Register a new company

  1. File for a business license application with the state of Washington.
  2. The Department of Revenue will process your application and notify L&I to open a workers' compensation account and the Employment Security Department (ESD) to open an unemployment insurance account.
  3. You'll receive a letter from your new Workers' Comp account manager, and a packet of information which you'll need to retain that includes:
  • Your Unified Business Identification (UBI)
  • Your ES (Employment Security) Account Number
  • Your Workers' Comp Account ID
  • Your Participant Activation Code (PAC) for WA L&I 
  • Your State Unemployment and Employment Administration Fund rate

This will be sent to you 10 days after registering online, or within 6 weeks if registering by mail.

Note: the Department of Revenue no longer issues PAC codes. The PAC code we need will be issued by Washington L&I.

Workers' Compensation Insurance

Workers' Compensation Insurance protects and covers your business against injuries and illness that could occur as a direct result of the work done while your employees are on the job. Washington requires that employers get their coverage through a state-operated fund. Gusto will pay this insurance premium on your behalf to the state. Once you have completed the registration process above, you can find the rates assigned to you online:

  1. Visit the Washington State Department of Labor & Industries website here.
  2. Select to search by your company name, Workers' Comp account number, or WA UBI number and enter the information.
  3. Choose on your company name from the list of results.
  4. Click Workers' Comp Rates.
  5. Find your 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 (ie. the dry wall industry).
  6. Enter the information into Gusto and you're all set.

 

If you are viewing your rates from the WA Workers' Compensation Rate Notice, make sure to input the Total Hourly Rate (combined Hourly Employer Contribution + Hourly Employee Withholding) as the Hourly Rate, and the Hourly Employee Withholding as the Employee Withholding.

 

If you're running your business as a sole proprietorship or other business type without employees (owners only), you have the choice of not purchasing workers' comp insurance.

 

Unemployment Tax

 

New employers are assessed an unemployment tax rate based on their industry. In 2019 the new employer rates can range from 1%-5.4% with a wage base of $49,800. If you're unsure about your rate, it is best to call the agency's Rate Unit at (855) 829-9243, option 3.

 

Paid Family & Medical Leave (PFML)

 

Effective January 1, 2019, premium collection began for Washington's new Paid Family and Medical Leave benefits (benefits will be offered to workers who qualify starting January 1, 2020). The total premium amount due each year is up to 0.4% (up to the Social Security wage base) made up of both employee and company contributions. Employers with less than 50 employees are exempt from paying the employer share of this program, however, the employee-share is still required. 

Gusto now supports the employee premium collection (about 0.25%) on all 2019 payrolls. Employer contribution requirements vary based on company size and the contributions (about 0.15%) will be collected at the end of Q1 2019 for companies with 50 or more employees. 

Gusto will report and pay PFML premiums for all Washington employers. Both Q1 2019 and Q2 2019 payments and reports will be due in July 2019. There is no new account number for this program, the agency will use an employers existing UBI number. If any new information is needed, we'll reach out to collect this from customers.

Click here for more information about PFML.