Washington Workers Face Triple Tax Rate for Paid Family Leave

A Triple-Digit Jump for State Workers

Washington state workers are facing a triple-digit percentage increase in their payroll deductions for the state’s Paid Family and Medical Leave program since its inception, with the premium rate officially hitting its statutory cap of 1.2% of gross wages starting January 1, 2027.

The Employment Security Department announced on October 16 that the upcoming rate will climb from this year’s 1.13%. Employees bear the brunt of that deduction, covering 70.7% of the total bill. When the program first took effect in 2019, the rate sat at 0.4%.

The Impact on Paychecks Statewide

Seattle Red reported that the accelerating tax has sparked intense debate over who actually benefits from the state-mandated insurance fund. For a worker earning Washington’s average covered wage of $99,810, the employee share of the 2027 tax comes to roughly $847 a year. Back in 2019, that same paycheck surrendered about $250. Meanwhile, a full-time grocery clerk in Yakima earning $18 an hour will pay about $318 next year.

Usage Disparities Fuel Equity Debate

According to data from the Employment Security Department, more than 221,000 people claimed benefits during the first nine months of 2026, totaling over $1.8 billion in payouts. But critics argue the financial burden flows uphill. The Washington Policy Center contends that lower-income earners are effectively subsidizing higher earners, pointing to figures showing that people making $61 an hour or more utilize the program more than twice as much as those in the lowest-earning quintile.

Washington State PAID FAMILY MEDICAL LEAVE PAYROLL TAX INCREASE Oct. 27, 2026Washington paid leave tax hits 1.2% cap for 2027, lawmakers eyeing liftOct. 27, 2026Washington workers will see a higher deduction on their paychecks come January 1, 2027 as the state collects… pic.twitter.com/RTWXW5Tg1r

— https://x.com/Susan_Dupres/status/2115115272130699558

An earlier review of wage data from fiscal year 2024 revealed that 17% of recipients earned more than $60 an hour, while only 9% earned $18 or less. In a newly released alert, the Washington Policy Center called it indefensible to move money from low-income workers to people with ample resources, warning that Washington state workers cannot afford any additional payroll tax increases for the program.

“Washington state workers can’t afford any additional payroll tax increases for PFML,” the Washington Policy Center warned, arguing that the tax bankrolls time off primarily for people who can already afford it.

Solvency Pressures and Statutory Ceilings

The 1.2% limit is currently the only barrier holding the rate steady, but that ceiling is under pressure. When lawmakers previously considered Senate Bill 5292, a House committee advanced an amendment to raise the statutory ceiling in incremental steps until it reached 2% by 2033. Although the final version that passed retained the 1.2% limit, agency analysis presented to legislators warned that the current cap will prevent the program from remaining solvent over the long haul.

Broader Tax Climate and Ballot Box Battles

Elizabeth New, who directs the Washington Policy Center’s Center for Worker Rights, wrote that the current percentage is a ceiling that some lawmakers actively want to bust. Any future hike would compound a tax climate already squeezing workers and employers across the state, adding to pressures like the millionaires’ income tax Governor Bob Ferguson championed.

Paid family medical leave policy washington portrait

Voters are weighing in on related tax battles at the ballot box, even as think tanks urge lawmakers to scrap the family leave program entirely rather than raise its financial ceiling. For now, workers across the state will watch their January paystubs shrink a little further as the maximum allowable tax rate finally takes hold.