Oregon Payroll Compliance
Every rate, wage base, and regional rule Oregon employers need for 2026 — sourced from BOLI, the Dept. of Revenue, and Paid Leave Oregon — including the three-tier minimum wage system that changes every July 1, not January 1.
Minimum Wage & Hours
Oregon runs a three-tier regional minimum wage — unlike any other state’s local-ordinance model, this is a single statewide law (ORS 653.025) that sets three different rates by county. All three tiers adjust every July 1, not January 1, based on CPI-U. Oregon bans tip credits outright: tips can never substitute for any portion of the minimum wage.
| Item | 2026–27 Value | Notes |
|---|---|---|
| Portland Metro rate | $16.80/hr | Urban growth boundary: parts of Clackamas, Multnomah, Washington counties |
| Standard rate | $15.55/hr | 15 named counties plus non-UGB parts of the metro counties |
| Nonurban rate | $14.55/hr | 17 rural counties, effective July 1, 2026 |
| Tip credit | Not permitted | Tips never substitute for any portion of minimum wage |
| Exempt salary threshold | $684/wk ($35,568/yr) | Federal FLSA threshold controls; Oregon has no higher state minimum |
| Student-learner rate | 75% of applicable rate | Requires Commissioner approval; bona fide training programs only |
| Annual adjustment | July 1, CPI-U | Announced by BOLI no later than April 30 each year |
Regional Minimum Wage Detail
The rate is determined by where the employee physically performs work, not where the employer is headquartered or where the employee lives. A worker who splits time across regions is paid at the rate for wherever they work 50% or more of their hours in a week.
State Income Tax Withholding
Oregon uses four graduated brackets topping out at 9.9% above $125,000 of taxable income. Oregon decouples its state withholding form from the federal W-4 entirely — every new hire completes both. On top of income tax, a statewide transit tax applies to all wages.
| Item | 2026 Value | Notes |
|---|---|---|
| Bracket 1 | 4.75% | Up to $4,050 of taxable income (single) |
| Bracket 2 | 6.75% | $4,050 – $10,200 |
| Bracket 3 | 8.75% | $10,200 – $125,000 |
| Bracket 4 (top) | 9.9% | Above $125,000; this threshold is fixed in statute, not indexed |
| Personal exemption | $263 tax credit | Per exemption — a credit, not a deduction |
| Required certificate | Form OR-W-4 | Separate from the federal W-4; both must be completed |
| Statewide transit tax | 0.1% | Employer-paid, on all wages, filed alongside withholding |
| TriMet / Lane transit tax | Additional, varies | Applies on top of the statewide transit tax in those districts |
| Supplemental wage rate | 8% flat | Optional flat-rate method for bonuses and commissions |
| Combined filing portal | Frances Online | Withholding, transit tax, and (separately) SUI |
Paid Leave Oregon (PFMLI)
Paid Leave Oregon funds paid family, medical, and safe leave through a combined 1.0% contribution, split 60% employee / 40% employer. Employers with fewer than 25 employees are exempt from the employer share but must still withhold and remit the employee portion.
| Item | 2026 Value | Notes |
|---|---|---|
| Total contribution rate | 1.0% | Of gross wages, up to the Social Security wage base |
| Employee share | 0.6% (60%) | Withheld from all covered employees |
| Employer share | 0.4% (40%) | Waived for employers with fewer than 25 employees |
| Wage cap | Social Security wage base | $184,500 for 2026 |
| Leave duration | Up to 12 weeks | Plus up to 2 additional weeks for pregnancy-related conditions |
Unemployment Insurance (SUI)
Oregon’s SUI wage base rose to $56,700 for 2026, among the highest in the nation. The Oregon Employment Department assigns new employers a flat 2.4% rate under the state’s current tax schedule before moving them to experience rating.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $56,700 | Up from $54,300 in 2025 |
| New employer rate | 2.4% | Unchanged year-over-year; Tax Schedule 3 for 2026 |
| Experienced employer range | 0.9% – 5.4% | Set by individual claims history |
| Filing portal | Frances Online | Combined system for withholding, transit tax, and SUI |
Official Oregon .gov Resources
Verify every figure and register for accounts at the source. These are the agencies Oregon employers work with for payroll.