Does Washington State Have an Income Tax? What You Actually Pay in 2026

Washington taxes on your paycheck in 2026

Washington has no wage tax, so the state takes very little from a paycheck. The two deductions you will see are both payroll premiums for social insurance programs. They are not income taxes.

PFML premiums are 1.13% of gross wages in 2026, up from 0.92% in 2025. Employees pay 71.43% of that, about 0.81% of wages, and employers pay the rest. Premiums only apply to wages up to the Social Security wage base ($184,500 in 2026). Employers with fewer than 50 employees don't pay the employer share, but they still collect the employee share. WA Cares premiums are 0.58% of gross wages with no wage cap. Some people are exempt, such as certain out-of-state residents, military spouses and holders of nonimmigrant work visas.

Many hourly workers also see a small deduction for the employee share of workers' compensation premiums from Labor & Industries. This is charged in cents per hour worked and varies by job classification. Washington does not take unemployment insurance out of employee pay.

Worked example: $60,000 salary in Seattle

Take a single filer earning $60,000 in Seattle in 2026 with no pre-tax deductions. Federal taxable income is $60,000 − $16,100 standard deduction = $43,900. Federal income tax is $1,240 on the first $12,400 plus 12% of the next $31,500, which comes to $5,020. FICA is 7.65%, or $4,590.

Washington adds about $484 in PFML and $348 in WA Cares. Annual take-home pay is roughly $49,558, about $4,130 a month. The same salary in Texas or Florida nets $50,390 because those states have no PFML or long-term-care premium. In California it nets about $48,037. Seattle has no city income tax either. A 2017 attempt at a city income tax on high earners was struck down by the courts.

Capital gains excise tax: 7% and 9.9%

Washington's capital gains tax works like a narrow income tax. It applies to long-term gains from selling stocks, bonds, business interests and some other assets. Real estate, retirement accounts and certain qualifying family-business sales are exempt. You first subtract an inflation-adjusted standard deduction, which the Department of Revenue set at $278,000 for 2025. The first $1 million of taxable gains is taxed at 7%. Since tax year 2025, taxable gains above $1 million pay an extra 2.9%, for 9.9% in total.

Example: if you sell stock in 2025 at a $500,000 long-term gain, about $222,000 is taxable ($500,000 − $278,000), and the tax is roughly $15,540 at 7%. A gain of $1.5 million is taxed on about $1,222,000: $70,000 on the first $1 million plus 9.9% of $222,000 ($21,978), or about $91,978. Most households never owe this tax.

The 2028 "millionaires' tax"

In March 2026, Washington enacted ESSB 6346. It creates a 9.9% tax on Washington taxable income above a $1 million standard deduction, and the deduction is indexed for inflation. The tax starts on January 1, 2028. The first returns and payments are due in April 2029. According to the Senate sponsors' FAQ, it counts wages and pass-through business income, offers credits for capital gains tax and B&O tax already paid, and comes with an expanded Working Families Tax Credit and new sales-tax exemptions for diapers, hygiene products and over-the-counter medicines.

For 2026 and 2027, nobody owes Washington tax on wages. Expect legal challenges, because Washington courts have historically treated income as property that can't be taxed at graduated rates.

Sales tax and B&O: where Washington gets its money

The state sales tax is 6.5%. Cities and counties add their own rates. Tax Foundation puts Washington's average combined rate at 9.57% as of July 1, 2026, the third-highest in the country. Seattle's combined rate is 10.55% in 2026 after two new 0.1% public-safety taxes took effect on January 1. Since October 1, 2025, sales tax also applies to some services that used to be exempt, such as certain IT, advertising, temporary staffing and custom software services.

Businesses pay the business and occupation (B&O) tax on gross receipts, not profit. Rates depend on the type of activity. Retailing is 0.471% and wholesaling is 0.484%, and for larger firms the service rates now rise in tiers up to 2.1% of gross income. Shoppers end up paying part of B&O through higher prices. Washington also has property tax and an estate tax.

Is Washington actually cheaper than an income-tax state?

It depends on your income and how you spend it. Sales tax takes a larger share of income from lower earners, because they spend most of what they earn. High earners spend a smaller share and save the rest untaxed. A $150,000 earner moving from Oregon (9.9% top rate, no sales tax) to Washington saves thousands in income tax but pays sales tax of about 9–10% on taxable purchases. Run both states through our paycheck calculator and compare your take-home pay before and after you add an estimate of yearly taxable spending.