How to calculate WA long-term care tax?
Taxpayers can calculate the deduction by multiplying the gross wages by 0.0058 — 0.58%.
Unlike Social Security, this tax does not have a wage cap. In other words, you will pay the exact same percentage on all your earnings throughout the entire year — no matter how much you make.
The process below can be followed for any pay period:
- Find gross pay on the paystub — this is the total pay before any taxes or other deductions are taken out
- Multiply x gross pay amount by 0.0058
- Round the result to the closer cent & match it against the WA Cares line on the paystub
Which parts of pay generally count?
Payroll systems generally apply the tax to anything that increases the gross pay. This generally contain:
- Regular salary or hourly wages
- Overtime pay
- Commissions
- Bonuses
What does the deduction look like on common pay amounts?
How can you budget the cost for the year?
A possible way to plan a budget is to figure out “the total expected pay for the year”. Apply the 0.58% rate to the total and then divide it by the number of paychecks you get annually.
Why might your actual amount not match your estimate?
If the amounts don't match exactly, the reason generally is just the payroll software setup — not a math error. Common reasons are exemplified below:
- Rounding rules within the specific payroll system
- Back pay — retro pay — added to the current check
- A partial pay period — like starting a new job & leaving a job or taking unpaid time off
- An approved exemption that removes the tax line from the paystub completely
What should employers check when setting up payroll?
- Verify the employee actually works in Washington for payroll reporting purposes
- Make sure that the WA Cares deduction code is turned on for all eligible staff
- Run a test after making any changes to the payroll schedule
- Save copies of any employee exemption approval letters on file in case of an audit
Helium Day Tax & CPAs can answer questions about WA Cares math
If your paystub is missing the deduction & presenting double the amount or swinging wildly between paychecks — we are here to help. Reach out to Helium Day Tax & CPAs today to review details and check the payroll setup.