Let’s kick off 2025 and take care of some housekeeping! Starting with reviewing your payroll settings and updating employer wage and tax rates.

First

Check that your minimum wage rates are set to the new 2025 amounts if you have hourly workers. The WA 2025 minimum hourly wage rate is now $16.66 for employees aged 16 or older. (up from $16.28 in 2024) Employees aged 14 and 15 may be paid 85% of this. Tips, service charges, and healthcare benefits may not be used as part of this minimum hourly rate. (link)

Second

Don’t forget that the minimum wage rate is based on where the employee works, not the employer or employee’s residence. Some WA State cities are higher than the state minimum including Tukwila, Renton, and SeaTac.

• For employees working in Seattle city limits, the 2025 minimum wage is now $20.76/hour. Tips, service charges, and healthcare benefits may not be used as part of this minimum by employers of any size. (link)
• Bellingham is now $17.66 (link)
• Burien is now $21.16 for large employers, $20.16 for mid-size employers, and $16.66 for employers with fewer than 21 FTE (Full Time Equivalent) employees. (link)
• Everett is now $20.24 for large employers, $18.24 for employers with 15-500 FTEs, and $16.66 for employers with fewer than 15 FTEs. (link)

Contact your city government for the most accurate information if you cannot find the current rates online.

Third

Make sure to update your Paid Family Medical Leave Payroll tax rate.

• The rate for companies with 50 or more FTEs is now .92% of all gross wages, excluding tips, up to the 2025 Social Security wage base of $176,100. Employees pay 71.52% of the tax through a payroll deduction. Employers pay the remaining 28.48% of the tax.
• The rate for employers with fewer than 50 FTEs is .658% and the employee pays the entire portion through a payroll deduction.
• The WA Cares premium rate is the same as 2024, .58% of gross wages with no wage limit. This is paid entirely by the employee through a payroll deduction. (link) 

Last

Some extra items of note in January each year.

• Review Workers’ Compensation risk class rates mailed annually by the WA Dept of Labor and Industries.
• Make sure you are set up to pay your Federal payroll tax deposits timely. The IRS will mail a notice reminding you of any frequency changes which may be semi-weekly, monthly, or quarterly. Your frequency depends on how much in total FICA (Form 940 and 944) payments was paid in the previous calendar year. (link)

Reach out today to learn more about how our bookkeeping services can help your business in the new year.