Oregon Local Taxes

Background 

Oregon has several local taxes. These local taxes are imposed on employees who work in a business district and meet the tax law’s requirements. 

Oregon’s local taxes include:

• Metro Supportive Housing Services (SHS) Tax
• Multnomah County Preschool for All (PFA) Tax
• Eugene Community Safety Payroll Tax 

In addition to the statewide Oregon transit tax (which applies to all employees who live or work in the state), these local transit taxes are also calculated (and collected and filed if Full Service):

• Canby Transit Tax
• Lane Transit Tax
• Sandy Transit Tax
• South Clackamas Transit Tax
• TriMet Transit Tax
• Wilsonville Transit Tax

Oregon local taxes are calculated for both Basic payroll and Full Service payroll. The taxes are collected and filed if you have Full Service payroll.

For more information on the statewide Oregon transit tax, check out our article, “What Is the Oregon Transit Tax? Your Guide to the Statewide Employee Tax.”

Metro SHS Tax

The Metro SHS tax is an employee-only tax that funds housing access for individuals experiencing or at risk of homelessness. It applies to employees who:

• Work in Metro (Clackamas, Multnomah, or Washington counties)
  AND
• Earn over $125,000 (single) or $200,000 (married filing jointly)

As the employer, you must withhold this tax if an employee earns above a threshold of $200,000 per year. The withholding amount varies based on the employee’s earnings and the locality’s legislation (but don’t worry, we’ll calculate this for you!).  

Employees who earn over $200,000 per year can specify a certain withholding amount or opt-out of the payroll tax withholding. Employees who opt-out are responsible for paying SHS tax via quarterly estimated payments or with their income tax return. 

Employees who earn under $200,000 per year can opt-in to the payroll tax withholding. To do so, they must specify a withholding amount. 

Employees can opt-in or opt-out of Metro SHS payroll tax withholding by filling out the Metro/MultCo OPT form. Keep submitted forms in your payroll records. 

How to add or edit Metro SHS tax withholding for an employee

1. Go to Payroll > Employee List > Select Employee Name > Taxes.
2. Scroll to Local Withholding > Edit. 
3. Select Yes under “Do you want us to calculate Metro Supportive Housing Services (SHS) tax for this employee?” 
4. You can also enter a specific tax withholding amount to override the payroll withholding calculation. To use the default calculation, leave this field blank.
   

For more information on SHS tax, check out our article, “The Oregon Employer’s Guide to the New Metro Supportive Housing Services Tax.”

Multnomah County PFA Tax

The Multnomah County PFA tax is an employee-only tax that funds a tuition-free preschool program. It applies to employees who:

• Work in Multnomah County
  AND
• Earn over $125,000 (single) or $200,000 (married filing jointly)

As the employer, you must withhold this tax if an employee earns above a threshold of $200,000 per year. The withholding amount varies based on the employee’s earnings and the locality’s legislation (again, we’ve got you covered!). 

Employees who earn over $200,000 per year can specify a certain withholding amount or opt out of the payroll tax withholding. Employees who opt out are responsible for paying PFA tax via quarterly estimated payments or with their income tax return. 

Employees who earn under $200,000 per year can opt-in to the payroll tax withholding. To do so, they must specify a withholding amount. 

Employees can opt in or opt-out of Multnomah County PFA payroll tax withholding by filling out the Metro/MultCo OPT form. Keep submitted forms in your payroll records. 

How to add or edit Multnomah County PFA tax withholding for an employee

1. Go to Payroll > Employee List > Select Employee Name > Taxes.
2. Scroll to Local Withholding > Edit. 
3. Select Yes under Do you want us to calculate Multnomah County Preschool for All (PFA) tax for this employee? 
4. You can also enter a specific tax withholding amount to override the payroll withholding calculation. If you want the normal withholding leave this field empty.
   

For more information on PFA, check out our article, “The Scoop on Oregon’s Multnomah County Preschool for All Tax.“

TriMet Transit Tax

The TriMet tax is an employer-only tax and is calculated based on the wages paid to an employee working in the TriMet area. You can confirm the TriMet transit tax area from this interactive map.

How to indicate the employee works in the TriMet area

1. Go to Payroll > Employee List > Select Employee Name > Employee Info. Scroll to Oregon Employer Transit Tax.
2. Click Edit.
3. Select Employee works in the TriMet transit district from the drop-down menu.
4. Click Save.

Lane Transit Tax

The Lane Transit tax is an employer-only tax and is calculated based on the wages paid to an employee working in the Lane Transit area.

How indicate the employee works in the Lane Transit area

1. Go to Payroll > Employee List > Select Employee Name > Pay Info. 
2. Scroll to Oregon Employer Transit Tax > Edit. 
3. Select Employee works in the Lane transit district from the drop-down menu.
4. Click Save.

Eugene Community Safety Payroll Tax

The Eugene Community Safety Payroll Tax is both an employer and employee tax and is imposed on the total subject wages paid to employees when businesses have a physical address in the Eugene city limits. You can determine if your business is within the Eugene Community Safety Limits on the Eugene City website.

Assigning an employee to a work location with the tax jurisdiction of Eugene, Oregon will automatically calculate Eugene payroll taxes.

How to make a company exempt from Eugene payroll taxes

1. Go to Settings > Payroll Settings > Tax Exemptions > Oregon.
2. Click the Add a Company Eugene Payroll Exemption Status button.
3. Click the Exempt radio button.
4. Enter in an Effective date.
5. Click Save.

How to make an employee exempt from Eugene payroll taxes

1. Go to Payroll > Employees > Employee List > {Employee Name}.
2. Click the Advanced Tax Settings tab.
3. Click the Add a Eugene Payroll Tax Exemption button located near the bottom of the page.
4. Click the Exempt radio button.
5. Add an Effective date.
6. Click Save.

Why aren’t Eugene taxes calculated on my employee?

Here are reasons Eugene payroll taxes may not be calculated on your employee:

1. Your employee may be below minimum wage. If that is the case, the software will not calculate the Eugene payroll tax.
2. You may not have the correct tax jurisdiction selected.
   • Go to Settings > Payroll Settings > Tax Location. 
   • Click Change.
   • Select Eugene, Oregon, in the drop-down for your business work location.
   • Click Save.
3. Your employee may be working in a different location than Eugene (even if you have a work location in Eugene.)
   • Please contact support for payroll edits.

For more information, check out our article, “Everything You Need to Know About the Eugene Community Safety Payroll Tax.”

Canby Transit Tax

The Canby local transit district comprises designated areas within the city and the Canby Urban Growth Boundary (UGB) that receive the benefits of a transit system. The UGB is an area including and extending somewhat beyond the city limits of Canby. All employers, including nonresident employers, who are or have been paying wages earned in the Canby transit district must pay the transit tax.

How to indicate the employee works in the Canby Transit area

1. Go to Payroll > Employee List > Select Employee Name > Pay Info. 
2. Scroll to Oregon Employer Transit Tax > Edit. 
3. Select Employee works in the Canby transit district from the dropdown.
4. Click Save.

Sandy Transit Tax

The Sandy transit tax is an employer-paid tax assessed on all businesses located within the district and any that transact businesses within the district (nonresident employers). The tax is assessed on payroll and all forms of compensation (including officers) of employees who work within the local transit area.

How to indicate the employee works in the Sandy Transit area

1. Go to Payroll > Employee List > Select Employee Name > Pay Info. 
2. Scroll to Oregon Employer Transit Tax > Edit. 
3. Select Employee works in the Sandy transit district”from the dropdown.
4. Click Save.

South Clackamas Transit Tax

The South Clackamas transit tax is an employer-paid tax assessed on all employee wages for services performed within the South Clackamas Transportation District (SCTD).

How to indicate the employee works in the SCTD Transit area

• Go to Payroll > Employee List > Select Employee Name > Pay Info. 
• Scroll to Oregon Employer Transit Tax > Edit. 
• Select Employee works in the South Clackamas transit district from the dropdown.
• Click Save.

Wilsonville Transit Tax

The Wilsonville Transit District Payroll Excise Tax is paid by the employer. All employers, including nonresident employers, who are paying wages earned in the City of Wilsonville, must register and file with the City of Wilsonville Tax Department.

How to indicate the employee works in the Wilsonville Transit area

1. Go to Payroll > Employee List > Select Employee Name > Pay Info. 
2. Scroll to Oregon Employer Transit Tax > Edit. 
3. Select Employee works in the Wilsonville transit district from the dropdown.
4. Click Save.

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