Overview
Oregon has one of the highest state income tax rates in the nation, with a progressive system that can reach over 9.9%. The state also levies a Statewide Transit Tax on employee wages and requires separate Oregon Workers’ Benefit Fund assessments. Oregon has no sales tax, making income tax the state’s primary revenue source.
State Income Tax (SIT)
Oregon’s progressive income tax features multiple brackets with a top rate exceeding 9.9%. The state requires FIT to be calculated alongside Oregon SIT because the federal tax liability factors into the Oregon calculation. Employees complete Form OR-W-4 with their filing status and allowances. Oregon also has a Statewide Transit Tax (STT) that applies to all wages with no wage base limit.
| Tax Structure | Progressive (top rate over 9.9%) |
| State Withholding Form | Form OR-W-4 |
| Filing Statuses | S, M, H |
| Supplemental Rate | 8% |
| Statewide Transit Tax | Applies to all wages with no wage base limit |
Setup Note: FIT must be calculated alongside Oregon SIT.
Supplemental Wages
Oregon supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 8%.
Employer State Unemployment Tax (SUTA)
Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 2.6%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 2.6% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Local Taxes: Oregon has occupational license fees that may apply depending on the employee’s work and residence location. Be sure to verify which local jurisdictions apply to each employee.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to:
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