Eugene, Oregon Community Safety Payroll Tax

At a Glance

• Eugene, Oregon City Council passed Ordinance #20616 implementing a new payroll tax to provide funding for community safety services
• Eugene Payroll Tax will be effective on January 1, 2021
• The tax will be in effect for seven years, until December 31, 2028
• All employers who pay wages to employees and the self-employed persons with a physical address in Eugene city limits must pay this tax
• This is both and employer and employee payroll tax. The
• Returns and payments are due on a quarterly basis

Introduction

This is a payroll tax for employers and employees, the tax provides the funds for community safety services.

Beginning January 1, 2021 the employer is responsible for reporting and paying the employer payroll tax, as well as, withholding and remitting the payroll tax on behalf of all employees with subject wages. The report and taxes are due each quarter.

Employer Requirements

Public government employers are exempt from the employer payroll tax; however, public government employees are subject to the employee payroll tax if they work at a public employer located within the Eugene city limits.

Nonprofit 501(c) (3) organizations are subject to the employer payroll tax and their employees are subject to the employee payroll tax.

Employers will need to register with the city to report and pay the Community Payroll Safety Tax. Employers should use the City’s “search by address tool” which can be found on their website to confirm if they in fact are within the city limits.

Tax Rates

 Employer payroll tax will be applied to total gross wages at a tax rate of 0.21%. Employers with two or less employees, the tax rate is 0.15% for the first $100,000 of wages paid.

 Employee payroll tax is applied to total taxable wages paid to an employee working at an employer located in the Eugene city limits. The tax rate for the employee payroll tax is based on the hourly rate of the employee:

• An employee making more than $15 per hour the withholding tax is calculated at a rate of 0.44% of total taxable wages.
• A non-minimum wage employee that makes between $12.01 and $15.00 per hour or less, the withholding tax is calculated at a rate of 0.30% of total taxable wages.
• An employee that makes the minimum wage ($12.00 per hour as of July 1, 2020) is exempt from the employee payroll tax. 

Self-employment tax is calculated at a rate of 0.21% of the net earnings from self- employment. For self-employed individuals with two or less employees the tax rate is 0.15% for the first $100,000 of net earnings from self-employment.

Next Steps

At this time, Paylocity is awaiting additional agency guidance. As soon as this information is available we will provide additional updates.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.