Washington DC Payroll Compliance
Every rate, wage base, and threshold DC employers need for 2026 — sourced from OTR, DOES, and the DC Paid Family Leave program — including the employer-only PFL model that’s unique among major paid-leave jurisdictions.
Minimum Wage & Hours
DC’s minimum wage is $17.95/hour through June 30, 2026, then rises to $18.40/hour on July 1 — DC uses a July fiscal-year cycle for its CPI adjustment, unlike most states’ January 1 changes. It has been the highest minimum wage of any U.S. jurisdiction outside a handful of individual CA/WA cities for several years running.
| Item | 2026 Value | Notes |
|---|---|---|
| Minimum wage (through Jun 30) | $17.95/hr | Effective since July 1, 2025 |
| Minimum wage (from Jul 1) | $18.40/hr | Annual CPI adjustment, effective every July 1 |
| Tipped cash wage (through Jun 30) | $10.00/hr | Rising toward full minimum wage under Initiative 82 |
| Tipped cash wage (from Jul 1) | $10.30/hr | Part of the multi-year phase-out of the tip credit |
| Overtime rule | 40 hrs/week | Federal FLSA; no separate DC daily overtime rule |
| Pay frequency | Twice/month minimum | Paydays within 10 working days of period close |
State Income Tax Withholding
DC uses six progressive brackets from 4% to 10.75%. Under the “183-Day Rule,” anyone maintaining a DC residence for at least 183 days is a legal resident for tax purposes — and DC residents owe DC tax on all income regardless of where they physically work.
| Item | 2026 Value | Notes |
|---|---|---|
| Bracket range | 4% – 10.75% | 6 brackets, uniform across all filing statuses |
| Standard deduction (single) | $15,000 | Married filing jointly: $30,000 |
| Required certificate | Form D-4 | Residents; nonresidents file D-4A instead |
| Reciprocity | VA, MD (informal) | DC residents working in VA/MD aren’t subject to that state’s withholding by default |
| Nonresident exemption | Form D-4A | Certificate of Nonresidence; without it, DC withholds by default |
| 183-Day Rule | DC Code §47-1801.04(17) | Determines legal residency for tax purposes |
| Further local/neighborhood tax | None | DC is a single taxing jurisdiction; no ward, neighborhood, or additional sub-district levies its own income tax on top of the rates above |
DC Paid Family Leave (PFL)
DC PFL is fully employer-funded — a genuinely unusual structure among major paid-leave programs. Employers never withhold PFL premiums from employee wages; the entire 0.75% cost comes directly from the employer’s payroll expense.
| Item | 2026 Value | Notes |
|---|---|---|
| Contribution rate | 0.75% | 100% employer-funded; no employee withholding at all |
| Wage cap | None | Applies to all wages, no ceiling |
| Coverage threshold | 1+ DC employee | Employer size has zero effect on the obligation to contribute |
| Max weekly benefit | $1,153.00 | 2026 figure; formula based on percentage of average weekly wage |
| Leave duration | Up to 12 weeks | 2 additional weeks for qualifying prenatal circumstances |
| Filing | Form UC-30 | Combined SUI + PFL quarterly wage report — one form covers both |
Unemployment Insurance (SUI)
DC has no minimum wage threshold before UI tax applies — even a single employee paid $1 triggers liability. New employers pay a flat 2.7% for four to five years before DOES assigns an experience rate.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $9,000 | Generally stable year over year |
| New employer rate | 2.7% | Standard rate for 4–5 years until experience rating begins |
| Experienced range | 1.9% – 7.4% | One of six tax tables in effect based on Trust Fund balance each Sept 30 |
| Registration | Joint application | One FR-500 application creates both SIT and SUI account numbers |