New Company Registration for Washington

Disclaimer: This article is not intended to be tax, legal, financial, or HR advice. Rules and regulations change over time and can vary by location. Consult with a lawyer, accountant, Tax, or HR expert for specific guidance.

Washington Department of Revenue

The state of Washington requires that employers register for a business license. This application initiates the process of creating your tax accounts with the Department of Labor & Industries (L&I) and the Employment Security Department (ESD)

Tax Agencies: Washington Department of Revenue, Washington State Department of Labor and Industries (L&I), & Washington Employment Security Department (ESD)

Registering Based on Business Type

Business Type	Action Items
Sole proprietorships and general partnerships	File a Business License Application with the Business Licensing Service.
Corporations, limited partnerships, LLCs and LLPs	First, create a business structure with the Office of the Secretary of State. Once the business structure is complete, file a Business License Application with the Business Licensing Service.
Businesses that are already licensed but that are hiring employees for the first time	Refile a business license application with the Business Licensing Service.

Processing Your Application

Notify WA Labor & Industry (L&I) to open a workers' compensation account.
Notify the Employment Security Department (ESD) to open an unemployment insurance account.

Receiving Letter From Your Workers Comp Account Manager

You'll receive a letter from your new Workers' Comp account manager, and a packet of information which you'll need to retain. The letter and packet will be sent to you 10 days after registering online, or within 6 weeks if registering by mail. The letter includes:

Your Unified Business Identification (UBI)
Your ES (Employment Security) Reference Number
Your Workers' Comp Account ID
Your Participant Activation Code (PAC) for WA L&I
Your State Unemployment and Employment Administration Fund rate

Washington Employment Security Department (ESD)

Upon registering for a business license in WA, employers will automatically receive their account credentials for the WA ESD. For more info, see here.

Types of Tax

State Unemployment Insurance (SUI) Tax

The ESD will provide your tax rate for state unemployment taxes. This rate is assigned by the state and must be entered into your Homebase Payroll settings to enable you to run payroll.
Washington Unemployment tax rate should fall between 0.27% to 8.15% including the Social Cost apportionment but excluding the EAF Apportionment

Paid Family & Medical Leave (PFML) Program

PFML tax is paid at the following rates:
- Employee Tax Portion: 0.58% of employee wages - required for all employees
- Employer Tax Portion: 0.22% of employee wages - only required for employers with greater than 50 employees

Long-term Care Act (beginning July 1, 2023)

Employee tax applied at 0.58% of employee wages.
Employees may apply for an exemption from this tax to avoid application on payroll. In order to qualify as exempt, the employee must receive an approval letter from the ESD which will indicate the effective date of the exemption. It is the employer's responsibility to enter this exempt status and effective date into the employee's profile in Homebase. Employers should also maintain a copy of the approval letter for their records.

Required Information for Employees in Washington

Washington tax filings require several unique pieces of information for employees working in the state. These fields are found on the Job Details page of employee profiles in Homebase and are required for an employee to be eligible for payroll.

Information for the Department of Labor & Industries filings:

Washington Labor & Industries (L&I) Employee Risk Class Code
Washington L&I Total Hourly Rate
Washington L&I Hourly Employee Withholding Rate

Risk class code information is determined by the type of work your employees are performing. The Department of Labor & Industries will either provide the proper class code information for your business, or you can use the Risk Class Lookup tool on the department's website.

Info for the Employment Security Department Filings

Standard Occupational Classification (SOC) Code (XX-XXXX, 6 digits)

The SOC codes system is maintained by the United States Department of Labor. Visit the DOL website to review a full list of SOC codes.
Beginning on filings for Quarter 4 of 2022, the Washington ESD requires SOC codes for all employees.

Corporate Officer Status (WA)

URL Name

New-Company-Registration-for-Washington

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