Last updated: December 31st, 2025
Each state has unique income tax withholding rules. Below are Oregon's 2026 withholding instructions, including allowance calculations, standard deduction adjustments, and the percentage method for determining tax due.
Employers must also adhere to federal income tax withholding rules. More information can be found here about federal rates.
Alternatively, employers can automatically calculate payroll withholding by using ezPaycheck.
| State Abbreviation | OR |
|---|---|
| State Tax Withholding State Code | 41 |
| Acceptable Exemption Form | OR-W-4 |
| Basis For Withholding | State Allowances |
| Acceptable Exemption Data | S, M, H / Number of Allowances |
| TSP Deferred | Yes |
| Special Coding | None |
| Additional Information | If an OR-W-4 is not provided, withhold at the highest rate (Single with 0 allowances). The Oregon Statewide Transit Tax (STT) remains at one-tenth of 1 percent (0.001) of gross wages pending the May 2026 ballot measure election. |
| Official State Tax Website | Visit Official Website |
For links to official state tax and revenue websites for all 50 states, visit our State and Local Tax Sites page.
Subtract nontaxable biweekly TSP or 401(k) contributions from gross biweekly wages.
Subtract nontaxable biweekly Federal Health Benefits (FSA, dental, vision) from Step 1.
Add taxable biweekly fringe benefits to Step 2 to find adjusted gross biweekly wages.
Multiply Step 3 by 26 to calculate gross annual wages.
Calculate the Federal Tax Subtraction. The maximum allowed is $8,750, but this amount phases out to $0 based on the employee's gross annual wages and filing status. Subtract this adjusted amount from gross annual wages.
Subtract the Oregon Standard Deduction: $2,910 for Single (< 3 allowances) or $5,820 for Married/Single (3+ allowances) to determine Oregon Taxable Income.
Calculate the base annual tax using the < $50,000 tables if annual wages are below that threshold.
Calculate the base annual tax using the >= $50,000 tables if annual wages meet or exceed that threshold.
Calculate the Personal Exemption Credit ($263 × Number of Allowances). Note: This credit phases out to $0 if annual wages exceed $100,000 (Single) or $200,000 (Married). Subtract this credit from the base annual tax.
Final Annual Oregon Tax = [Annual Tax from Table] - [Allowance Credit]
Divide the Final Annual Tax by 26 to obtain the biweekly withholding. Separately calculate and withhold the 0.1% Statewide Transit Tax on the gross wages.
Want to calculate in an easier way? Learn how to calculate Oregon taxes via ezPaycheck below.
Learn MoreThe annualized Federal withholding tax to be deducted cannot exceed the maximum amount shown in the following table based on marital status and the annualized gross pay.
| If the Amount of Taxable Income Is: | The Maximum Federal Deduction Amount Is: | |
|---|---|---|
| Over | But Not Over | Maximum Deduction |
| $50,000 | $125,000 | $8,750 |
| $125,000 | $130,000 | $7,000 |
| $130,000 | $135,000 | $5,250 |
| $135,000 | $140,000 | $3,500 |
| $140,000 | $145,000 | $1,750 |
| $145,000 | and over | $0 |
| If the Amount of Taxable Income Is: | The Maximum Federal Deduction Amount Is: | |
|---|---|---|
| Over | But Not Over | Maximum Deduction |
| $50,000 | $250,000 | $8,750 |
| $250,000 | $260,000 | $7,000 |
| $260,000 | $270,000 | $5,250 |
| $270,000 | $280,000 | $3,500 |
| $280,000 | $290,000 | $1,750 |
| $290,000 | and over | $0 |
| Annualized Wages | Deduction |
|---|---|
| Over $0 | Single claiming 0-2 allowances |
| Over $0 | Single claiming 3+ allowances |
| Annualized Wages | Deduction |
|---|---|
| Over $0 | $5,820 |
| If Taxable Income Is | Tax Withholding | ||||
|---|---|---|---|---|---|
| Over | But Not Over | Base | + | Rate | Of Excess Over |
| $0 | $9,100 | $263 | + | 4.75% | $0 |
| $9,100 | $22,800 | $695 | + | 6.75% | $9,100 |
| $22,800 | $50,000 | $1,620 | + | 8.75% | $22,800 |
| If Taxable Income Is | Tax Withholding | ||||
|---|---|---|---|---|---|
| Over | But Not Over | Base | + | Rate | Of Excess Over |
| $0 | $4,550 | $263 | + | 4.75% | $0 |
| $4,550 | $11,400 | $479 | + | 6.75% | $4,550 |
| $11,400 | $50,000 | $941 | + | 8.75% | $11,400 |
| If Taxable Income Is | Tax Withholding | ||||
|---|---|---|---|---|---|
| Over | But Not Over | Base | + | Rate | Of Excess Over |
| $0 | $35,430 | $0 | + | 0.00% | $0 |
| $35,430 | $250,000 | $1,357 | + | 8.75% | $22,800 |
| $250,000 | and over | $21,237 | + | 9.90% | $250,000 |
| If Taxable Income Is | Tax Withholding | ||||
|---|---|---|---|---|---|
| Over | But Not Over | Base | + | Rate | Of Excess Over |
| $0 | $38,340 | $0 | + | 0.00% | $0 |
| $38,340 | $125,000 | $678 | + | 8.75% | $11,400 |
| $125,000 | and over | $10,618 | + | 9.90% | $125,000 |
ezPaycheck simplifies payroll calculations, including Oregon's withholding rules. Easily compute taxes, generate reports, and print paychecks or tax forms.
We strive to provide accurate and up-to-date Oregon state tax information for 2026. If you notice any discrepancies, errors, or have questions about the tax rates or calculations shown on this page, please contact our support team. We appreciate your feedback and will review and update the information as needed.
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