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ezPaycheck: How to Handle Oregon Statewide Transit Tax

Oregon Transit Tax

On July 1, 2018, Oregon employers must start withholding the tax (one-tenth of 1 percent or .001) from:

  • Wages of Oregon residents (regardless of where the work is performed).
  • Wages of nonresidents who perform services in Oregon.

  • The statewide transit tax is calculated based on the employee's wages as defined in ORS 316.162. Employees who aren't subject to regular income tax withholding due to high exemptions, wages below the threshold for income tax withholding, or other factors are subject to statewide transit tax withholding.

    The definition of "wages" excludes amounts paid to certain types of employees and independent contractors (ORS 316.162). Self-employment income isn't subject to this tax.

    More details can be found at
    https://www.oregon.gov/DOR/programs/businesses/Pages/statewide-transit-tax.aspx

    How to Withhold Oregon Transit Tax

    ezPaycheck payroll software is very flexible. With ezPaycheck, user can easily add a new deduction to handle Oregan transit tax. Here are the steps on how to add a new payroll deduction:

    Step 1. Add a deduction for OR transit tax



  • 1.1. Start ezPaycheck, click the left menu “Company Settings->Deductions” to open the Company Deduction Setup screen.

  • 1.2. Check one Customized deduction item, then clicked the button behind it to open the Deduction Details screen.

  • 1.3. Input the new name (ie: "OR Transit Tax").

  • 1.4. Check the "Deduction in percentage of wage" option box..

  • 1.5. Leave exemption option boxes unchecked.

  • 1.6. Click the "Save" button on Deduction Details screen.

  • 1.7. Click the "Save" button on Company Deduction Setup screen to update the database.

  • Step 2. Edit employee settings to specify the rate/amount of the new deduction



  • 2.1. Select one employee from employee list and edited his deduction option.

  • 2.2. Enter "0.1" there.

  • 2.3. Click "next" button until the last page, then click the "Finish" button to save the change.

  • Step 3. Generate a new check and you will see transit tax there






    Trouble Shooting

  • Why the social security tax is not correct

  • Why the federal income tax is not correct

  • Why the state income tax is not correct


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