Please note: this article is about the Justworks Payroll product. Not sure which product you're using? Check out: How Do I Know Which Justworks Product I Have?
Paying employees in Washington
When hiring employees in new states, you will need to register for relevant state tax accounts to facilitate their payment. In Washington, you must be registered with the Washington Department of Revenue (business license), Washington State Department of Labor and Industries (L&I) (worker’s compensation), and the Washington Employment Security Department (ESD) (unemployment tax and Paid Family and Medical Leave).
Alternatively, Justworks Payroll can handle the registration process for you. We offer state tax registration services to assist with registering your business in new states. To request registration, please contact us at support@payroll.justworks.com.
Your Washington Accounts and Rate Info
Washington requires you to first register your company in the state with the Department of Revenue, the state will then share your information with the WA L&I and WA ESD agencies. The steps to register as a business vary based on your business structure:
- Sole proprietorships and general partnerships: File a Business License Application with the Business Licensing Service.
- Corporations, limited partnerships, LLCs, and LLPs: Establish a business structure with the Office of the Secretary of State by registering through the Corporations and Charities Filing System (CCFS). Afterward, file a Business License Application with the Business Licensing Service.
- Businesses already licensed but hiring employees for the first time: Refile a Business License Application with the Business Licensing Service.
After registering with the Department of Revenue, the state will process your application and:
- Notify WA Labor & Industry (L&I) to open a workers' compensation account.
- Notify the Employment Security Department (ESD) to open an unemployment insurance account.
Within 12 weeks of registering your business with the WA DOR, you will receive a letter from your new Workers' Comp account manager, and a packet of information which you'll need to keep that includes:
- Your Unified Business Identification (UBI)
- Your ES (Employment Security) Reference Number
- Your Workers' Comp Account ID
- Your Participant Activation Code (PAC) for WA L&I
- Reminder: The Department of Revenue no longer issues PAC codes. The PAC code will now be issued by Washington L&I.
- Your State Unemployment and Employment Administration Fund rate
Find This Information
Locate your Washington Unified Business Identifier (UBI):
- Existing businesses can search their UBI account number on the Department of Revenue website.
- Click "Look up a business" under the "I want to..." section
- Enter your company name and click Search
- UBI numbers usually start with a 6
Locate your Employment Security Number (ESD Number):
- You can locate your ESD account numbers on the Quarterly Tax and Wage Detail Reports (Form 5208 A).
- Your ESD and UBI numbers can also be found on the "annual tax rate" notice from the Employment Security Department.
- If you are unsure of your account numbers, contact the ESD at (360) 890-3500.
Locate your Employment Security Department Total Tax Rate (Unemployment Rate):
- Reviewing the annual notice from the Washington Employment Security Department, or;
- Calling the agency at (855) 829-9243.
Locate your Department of Labor & Industries (L&I) Account ID:
- You can find your account number by logging into your WA L&I account.
Locate your Participant Activation Code (PAC):
- Employers receive a Participation Activation Code (PAC) for their Workers’ Comp Insurance, which can be found on your Workers’ Comp "new account letter" and "annual rate notice."
- The PAC number ranges from 3 to 8 digits. If you are unsure of your number, contact the Washington L&I agency at (360) 902-4817.
Locate your Washington Risk Class Code Rates:
- Visit the Washington State Department of Labor & Industries website.
- Use the dropdown menu to search for your company by name, Workers' Comp account number, or WA UBI number, and enter the relevant information.
- Select your company name from the list of results.
- Click on "Workers' Comp Rates."
- Locate your agency-assigned Risk Classification, Composite Rate (Hourly Rate), and Employee Deduction (Employee Withholding).
Enter your Paid Family Leave Account Number:
- If your business has 50+ employees, you must pay the employer share of the premium. Learn more about Washington Paid Family and Medical Leave to help determine if your company is liable.
- If you mark yourself as liable for PFML you will need to enter in your WA PFML Account number. Your Washington PFML Insurance account number is your UBI with a leading C.
Entering State Tax Info in Justworks Payroll
Once you registered with the State and have a valid WA address added to your company’s offices, you can add your account info in Justworks Payroll by navigating to:
- Company > Settings in the left navigation bar
- Under ‘Company tax info’ click into “Washington” to edit the state tax information
In your Justworks Payroll account, you’ll want to enter in several account numbers such as, Washington Unified Business Identifier (UBI), Washington Paid Family and Medical Leave Insurance Account Number, Department of Labor & Industries (L&I) Account ID, Participant Activation Code (PAC), and the Employment Security Number (ESD Number). In addition to the account numbers, you will also need to enter in your Employment Security Department Total Tax Rate and your employee’s risk class code rates.
Third-party admin access
As your payroll provider, Justworks Payroll will utilize the provided account information to manage and report your WA tax liabilities. Occasionally, the state may issue notices related to payroll taxes.
Justworks Payroll can examine these notices if granted Third-party admin access to your WA state tax account. During onboarding, we will request that you sign state specific TPA forms, which authorizes us to handle and report your taxes to the state.
Why is this important?
Justworks Payroll calculates tax liabilities as part of payroll processing. If we cannot access your WA state tax accounts, we must return any unremitted tax liabilities to your company bank account, requiring you to remit and file your company’s state taxes manually.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.