Payroll services in Portland that cover every Oregon tax

Payroll services in Portland have extra layers

A payroll run in many states means federal withholding, Social Security, Medicare and a state income tax. In Portland, you add the Oregon statewide transit tax, the TriMet transit payroll tax, Paid Leave Oregon contributions, Oregon unemployment insurance, a Workers' Benefit Fund assessment and, for high earners, Metro and Multnomah County local withholding. Some come out of the employee's paycheck. Others are paid by you, the employer.

Mistakes tend to show up months later as a notice with penalties attached. That is why many Portland employers have a CPA either run payroll or check it each quarter before the reports go out.

Your request through Accountants Portland goes to a licensed CPA in our Portland area network who handles payroll for small businesses in the area.

Taxes withheld from employee pay

Oregon income tax withholding is based on the Form OR-W-4 each employee gives you. On top of that, the Oregon statewide transit tax is withheld at one tenth of 1 percent (0.001) of wages. It applies to wages of Oregon residents wherever they work and to wages of nonresidents for work done in Oregon, so a Vancouver resident working at your Portland shop is included.

Paid Leave Oregon is funded by a contribution of 1 percent of wages, up to $184,500 per employee for 2026. Employees pay 60 percent of that contribution through withholding.

Employers with a Metro location must withhold the Metro SHS personal income tax at 1 percent of earnings above $200,000 for employees who work within Metro. Employers with a Multnomah County location must withhold the Preschool for All tax at 1.5 percent of earnings above $200,000 and 3 percent above $400,000 for employees who work in the county. Employees can opt in or out of this local withholding using forms from Metro and the county.

Taxes the employer pays

Some Oregon payroll taxes never touch the employee's check. The TriMet transit payroll tax is imposed directly on the employer and is based on gross wages for work done inside the TriMet district. From 1/1/2026 the rate is 0.8237 percent (0.008237). Self employed people with earnings in the district may owe a separate transit self employment tax.

Employers also pay the remaining 40 percent of the Paid Leave Oregon contribution, unless they are a small employer with fewer than 25 employees on average, in which case the employer share is not required. Oregon unemployment insurance is paid by employers too. For 2026, the taxable wage base is $56,700 per employee, and new employers start at a 2.4 percent rate. You generally become subject to UI tax once you pay $1,000 or more in wages in a calendar quarter or have an employee in each of 18 weeks in a calendar year.

Then there are the federal employer taxes, including the employer share of Social Security and Medicare and federal unemployment tax reported each year on Form 940.

The Oregon and federal payroll filing calendar

Most Oregon employers report state payroll taxes on the Oregon Combined Payroll Tax Report, Form OQ, each quarter. Federal withholding and Social Security and Medicare are reported on Form 941 each quarter. The annual forms close out the year.

Federal payroll taxes are deposited separately from these quarterly filings, and the IRS gives employers who deposited everything on time a few extra days to file Form 941. Your CPA will confirm your deposit schedule and make sure deposits and reports agree.

Here are the main dates for 2026:

• Form OQ and Form 941 for the first quarter: 4/30/2026
• Form OQ and Form 941 for the second quarter: 7/31/2026
• Form OQ and Form 941 for the third quarter: 11/2/2026
• Form OQ for the fourth quarter: 2/1/2027
• Form OR-WR annual reconciliation: filed electronically through Revenue Online by 1/31 of the following year
• W-2 forms to employees and 1099-NEC forms for contractors: tax year 2025 forms were due 2/2/2026

Oregon minimum wage in the Portland metro area

Oregon sets three minimum wage tiers, and Portland area employers usually fall under the Portland metro rate. That rate applies within the urban growth boundary, which includes parts of Clackamas, Multnomah and Washington counties. From 7/1/2026 through 6/30/2027, the Portland metro minimum wage is $16.80 an hour. The standard rate is $15.55, and the rate for nonurban counties is $14.55.

Rates change every year on 7/1, so a payroll service should update pay for affected employees on that date. Employers with locations both inside and outside the urban growth boundary should confirm which rate applies to each worker with the Oregon Bureau of Labor and Industries.

Minimum wage also affects workers who earn more than the minimum. If a raise on 7/1 pushes entry level pay up, some employers review the next pay level too so the gap does not shrink. A CPA can show you what that does to payroll taxes and total labor cost before you decide.

Employees who work outside the TriMet district

The TriMet tax is based on where the work is done, not where the employee lives or where your office is. A Portland company with a crew that spends part of the year on jobs outside the district, or a remote employee who works from home in another part of Oregon, may owe TriMet tax on only part of the payroll. Getting this split right can lower the bill, but it needs records of where each person worked.

The Oregon Department of Revenue publishes a list of ZIP codes for the transit districts, but it describes that list as a guideline that may not match the district boundaries exactly. For an address close to the edge, TriMet's own boundary information is the better check. Oregon also has a second district payroll tax, the Lane Transit District tax, which applies to wages for work in that district at a rate of 0.80 percent for 2026.

Employees who live in Washington are a separate question. Their wages for work done in Oregon are still subject to the Oregon statewide transit tax, and a CPA can help you set up withholding for anyone who splits time between the two states.

Payroll records and getting a quote

The IRS asks employers to keep employment tax records for at least four years after filing the fourth quarter return for the year. That includes pay amounts and dates, employee details, withholding certificates such as Form W-4, deposit records and copies of filed returns. A CPA run payroll keeps these organized for you.

Tell us what you need and a licensed CPA who works with employers like you gets in touch with a clear, fixed quote. Let them know how many employees you have, how often you pay them and whether any work outside the TriMet district or outside Oregon.

If you are moving from a payroll app you ran yourself, the CPA will want your year to date payroll reports so the W-2 forms at year end include every paycheck, not just the ones after the switch.

Common questions