Paid Leave Oregon
Paid Leave Oregon provides paid family, medical and safe leave, funded by contributions split between employers and employees. Employers with fewer than 25 employees are not required to pay the employer share but must still withhold and remit the employee share. Contributions are reported through the Oregon combined payroll return, and rates are set annually — confirm the current rate with the Oregon Employment Department each January.
Transit taxes — two different things
- Statewide transit tax — withheld from wages of employees performing work in Oregon, remitted through the combined payroll return. It applies statewide, including in The Dalles and Hood River.
- TriMet payroll tax — an employer-paid tax on wages for work performed within the TriMet district, which covers most of the Portland urban area. Lane County has its own equivalent.
- TriMet self-employment tax — the same idea applied to self-employment earnings, filed by the individual rather than an employer. See Oregon transit taxes.
Metro SHS and Multnomah PFA employer withholding
This is the piece that trips up nearly every new Portland-area employer. Both taxes fall on the employee, but employers have withholding responsibilities, and the two regimes have different thresholds and different geographic boundaries:
| Tax | Applies to | Threshold | Rate |
|---|---|---|---|
| Metro Supportive Housing Services | Living or working in the Metro district | $128,000 single / $205,000 joint (2026) | 1% on income above the threshold |
| Multnomah County Preschool for All | Living or working in Multnomah County | $125,000 single / $200,000 joint | Tiered, starting at 1.5% |
The annual calendar
- 1January — new rates and thresholds take effect; W-2s and 1099s due to recipients; Q4 filings.
- 2Quarterly — Oregon combined payroll report, federal Form 941, unemployment insurance.
- 3Annually — Form 940 FUTA, Oregon annual reconciliation, local tax annual returns.
- 4On any change — new work location, new state, or an employee crossing a local threshold mid-year.
We hired someone who works from home in Vancouver. What changes?
Potentially everything about that employee’s withholding. If services are performed entirely in Washington, Oregon withholding may not apply — see remote work for an Oregon employer.
Do we have to withhold Metro SHS?
Employers are required to withhold for employees who work in the district and earn above the threshold, and employees may also opt in. The safe course is to determine work location precisely and apply the rule, rather than assuming.
What about workers’ compensation?
Nearly every Oregon employer needs coverage. It is not filed through payroll but it is part of the same compliance picture and we will flag it if it looks missing.
How often do the rates change?
Annually, and not all on the same schedule. That is why the January review is built into how we work.
Talk it through before filing season starts
Start with a complimentary 15-minute introductory call about your situation and whether we are a good fit. No tax advice is given on that call.
Written by
Bookkeeper, 25+ years
Katie has kept books for small businesses for more than 25 years — QuickBooks, payroll, AP, AR, reconciliations and monthly reporting.
Reviewed by
Heather Perkins
Enrolled Agent, Oregon Licensed Tax Consultant
Last reviewed
This page is general information about Oregon, Washington and federal tax rules, not advice about your own return. Thresholds and rates change every year. Figures were verified as of August 2026 — check the linked official sources, or talk to us about your situation.