Executive Summary
Establishing a tax a large companies to support the Well Washington Fund
Background
Social Security is a government program that helps people by providing money when they retire, become disabled, or when a family’s wage earner dies. The program is paid for through payroll taxes. Workers and their employers each pay 6.2% of the worker’s wages, but only up to a yearly limit.
In 2025, that limit was $176,100. This maximum amount changes every year based on national wage trends
Summary
What companies does this apply to:
Starting July 1, 2026, Washington will create a payroll tax for large companies that meet all of the following requirements:-
- Has more than 20 employees
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- Makes over $5 million in annual sales or receipts
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- Paid more than $7 million in total wages during the previous year
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- Has a U.S. business address.
How is the tax applied:
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- The tax is 5% of the total yearly wages a company pays above the Social Security wage limit (which was $176,100 in 2025). This tax is paid only by the employer, not by employees.
- This tax applies only to large companies and is charged on the portion of each employee’s wages that exceeds $176,100 per-year.
What is the tax used for:
Money from this tax will go into the Well Washington Fund (WWF). These funds can only be spent if the Legislature approves them, and they may be used only for:-
- Higher education programs
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- Health care
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- Cash assistance programs
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- Energy and housing programs
Key Points
Fiscal Impact
The tax will begin in July 2026, but the state will not start collecting it until at least mid‑2027 because the systems needed to administer the tax are not yet in place. Once collections begin, the tax is expected to generate about $4 billion per year in new revenue.
Ways to Get Involved
Steps to Get Started
- Learn where the bill is in the legislative process.
- If there is an upcoming hearing, decide how you would like to get your voice heard and take action.
- If there is not an upcoming hearing, or if you want to supplement your advocacy, call or write your legislators.
- Spread the word and get other people on board.
Participating in a Hearing
Sign in Pro, Con, or Other
This is when individuals, advocates, and organizations make their position on a particular bill known for the record. This is particularly powerful in large numbers. Many organizations will send out Action Alerts asking people to sign in Pro or Con on a bill.
Submit Written Testimony
Submitting written testimony is a great way not only to make your position known to legislators but also to explain why in more detail. This is a good option if you don’t want to speak in front of others. People also like to offer more nuance to their position by writing.
Testify Virtually
Since COVID, many legislators are allowing remote/virtual testimony for bill hearings, as it greatly expands access to the legislative process across the state. For this, individuals usually have between 1-2 minutes to state their opinion on a bill in front of the legislative committee on Zoom.