Does Oregon Require State Income Tax Withholding? Oregon Payroll Taxes for Employers

Yes. Oregon requires employers to withhold state income tax from employee paychecks, pay employer unemployment tax, and withhold for the Workers' Benefit Fund. Transit taxes may also apply by location.

What are the state payroll tax obligations?

Oregon requires employers to withhold state income taxes from employee paychecks in addition to employer-paid unemployment taxes. Oregon does not have reciprocal agreements with any other states.

Workers' Benefit Fund

Oregon also requires employers to withhold from employee wages to support Oregon's Workers' Benefit Fund. This is a payroll assessment calculated based on hours worked by all paid workers, owners and officers covered by workers' compensation insurance in Oregon, and by all workers subject to Oregon's workers' compensation laws (whether or not they are covered by workers' compensation insurance).

Local taxes

Lane and TriMet County Transit taxes may be imposed if the business is located in the respective transit area. The Oregon Department of Revenue publishes the current rates and the test for whether you are liable to withhold the TriMet or Lane Transit taxes.

How do I register as an employer?

Register with the State of Oregon Central Business Registry, either online or by completing and mailing Form 150-211-055, Combined Employer's Registration.
You will be assigned an Oregon Business Identification Number (BIN). The BIN is used for all payroll tax withholdings, unemployment insurance, workers' benefits, and TriMet and Lane Transit taxes.

What are the payroll tax filing requirements?

Form	What it is	Purpose	When it is filed
Form WR	Oregon Annual Withholding Tax Reconciliation Report	Reconciles state withholding at the end of each year	Due March 31 of the following year
Form OTC	Oregon Combined Payroll Tax Coupon	Determines how much tax is due each quarter for state unemployment and withholding, the Workers' Benefit Fund, and TriMet and Lane Transit excise taxes	Submitted with each payment, even when it accompanies a Form OQ
Form OQ	Oregon Quarterly Combined Tax Report	Determines how much tax is due each quarter for state unemployment and withholding, the Workers' Benefit Fund, and TriMet and Lane Transit excise taxes	Quarterly, due the month following a calendar quarter: April 30, July 31, October 31 and January 31
Oregon Schedule B	Filed with Form OQ	Used only if state income tax withholding deposits must be submitted semi-weekly or on a one-banking-day basis	With Form OQ
Form 132	Employee Detail Report, filed with Form OQ	Reports the total gross wages of each employee	Each quarter there are Oregon employees, with Form OQ

Note: Forms and payments can be filed online using Oregon's web-based FRANCES ONLINE. Employers who prefer paper may also order paper forms. Form OTC coupons are mailed in December to employers who do not remit electronically.

Anything else to know?

Most employers in Oregon are subject to workers' compensation plans, so employers must obtain workers' compensation before they bring on employees. Coverage can be obtained privately or through Oregon's state-funded plan (SAIF). The Oregon Bureau of Labor and Industries (BOLI) has more information.
California allows Oregon residents who perform services in California to take a credit toward their income tax liability for taxes paid to their home state of Oregon.

Where can I find more information?

The Oregon Department of Revenue, for information on all payroll taxes. Its resources section has manuals and additional information on payroll and transit taxes, plus an Employer's Guide for Doing Business in Oregon.
The Oregon Employment Department, Unemployment Insurance Tax Section, for more information on unemployment taxes.

Frequently asked questions

Does Oregon require employers to withhold state income tax?

Yes. Oregon requires employers to withhold state income taxes from employee paychecks, in addition to employer-paid unemployment taxes. Oregon does not have any reciprocal agreements with any other states.

What is the Oregon Workers' Benefit Fund assessment?

Oregon requires employers to withhold employee wages to support Oregon's Workers' Benefit Fund. It is a payroll assessment calculated based on hours worked by all paid workers, owners and officers covered by Workers' Compensation insurance in Oregon, and by all workers subject to Oregon's Workers' Compensation laws, whether or not they are covered by Workers' Compensation insurance.

Are there local payroll taxes in Oregon?

Lane and TriMet County Transit taxes may be imposed if the employer is located in the respective transit area. The Oregon Department of Revenue publishes more information, including how to check whether you are liable to withhold the TriMet or Lane Transit taxes.

How do I register as an employer in Oregon?

Register with the State of Oregon Central Business Registry, either online or by completing and mailing Form 150-211-055, Combined Employer's Registration. You will be assigned an Oregon Business Identification Number (BIN) to be used for all payroll tax withholdings, unemployment insurance, workers' benefits, and TriMet and Lane transit taxes.

Which Oregon payroll forms are filed each quarter?

Most employers file Form OQ, the Oregon Quarterly Combined Tax Report, due the month following a calendar quarter — April 30, July 31, October 31 and January 31 — along with Form 132, the Employee Detail Report, which is required for each quarter there are Oregon employees. Oregon Schedule B is also filed with Form OQ if state income tax withholding deposits are required semi-weekly or on a one-banking-day basis.

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