Your 2027 Washington Payroll Stack: Minimum Wage, Paid Leave, and the Numbers to Update

January payroll is easier when you know which settings need attention before the year begins. For Washington employers, several figures change on January 1, 2027. They affect hourly wages, overtime-exempt salary thresholds, paid leave premiums, and federal payroll tax planning.

I’ve gathered the key updates in one place. All the major numbers are final now, including the 2027 Paid Family and Medical Leave premium that was announced on October 16.

1. Washington’s minimum wage rises to $17.73 an hour

Washington’s minimum wage for most workers will be $17.73 per hour starting January 1, 2027. The state’s minimum wage update notes that some local jurisdictions set higher rates. If you have employees in more than one city, check the applicable local rules as well.

The minimum wage can also affect related payroll settings, including overtime-exempt salary thresholds. It’s a good time to review the hourly rates in your payroll system and confirm that the right rate applies to each employee and work location.

What to do: Update your payroll software with the 2027 wage rate, and check for any higher local minimum wage that applies to your employees.

2. Check overtime-exempt salaries against Washington’s thresholds

Washington’s overtime-exempt salary thresholds increase on January 1, 2027. The amount depends on employer size:

• Employers with 1–50 employees: at least $1,595.70 per week, or $82,976.40 per year.

• Employers with 51 or more employees: at least $1,773 per week, or $92,196 per year.

Washington’s overtime rules explain the salary requirements and the duties tests that also apply. Meeting the salary threshold alone does not make a position exempt. The employee’s job duties must satisfy the applicable test, too.

You may also see the federal overtime salary floor of $684 per week, or $35,568 per year. That federal figure is lower than Washington’s 2027 thresholds. For Washington employees, use the higher state standard.

This review doesn’t have to mean a major payroll overhaul. It’s a chance to confirm who is classified as exempt, check salaries against the right employer-size threshold, and review duties when a role has changed.

What to do: Re-check each exempt employee’s salary and duties against Washington’s 2027 rules. Confirm that your employee-count category is correct.

3. The 2027 Paid Family and Medical Leave premium is set

Washington’s 2026 Paid Family and Medical Leave (PFML) premium rate is 1.13% of gross wages, with the premium split between employers and employees under the state’s rules.

The 2027 rate is now official. The Employment Security Department announced on October 16, 2026 that the rate will be 1.2% starting January 1, 2027. Employers will pay 29.3% of the total premium and employees will pay 70.7%. More than 221,000 people claimed Paid Leave benefits in the first nine months of 2026, and that usage drives the annual rate recalculation ESD completes each October.

One more 2027 change is already decided. A 2026 law passed in response to new IRS guidance changes how the employer and employee contributions are divided between the family and medical leave premiums — without changing how the total premium is split between employees and employers.

ESD also calculated each employer’s business size on September 30, 2026, based on the average headcount from the previous four quarterly reports. If you counted 50 or more employees, you owe the full premium rate for wages paid in 2027 — both the employer share and the employee share. If you counted fewer than 50, you owe only the employee share unless you choose to opt in to paying the full rate. The opt-in window for 2027 runs until March 1.

For the official announcement, see the ESD’s 2027 premium news release. The state’s PFML updates page remains the place to watch for the final family and medical leave allocation detail.

What to do: Update your payroll settings with the confirmed 2027 rate — 1.2%, with 29.3% paid by the employer and 70.7% by the employee. Then confirm which side of the 50-employee line your business is on, since that decides whether you owe the employer share in 2027.

4. Update the Social Security wage base

The 2027 Social Security wage base is $192,300. The employer Social Security tax rate remains 6.2%. That means the maximum employer Social Security tax for an employee who reaches the wage base is $11,922.60 for the year.

The wage base applies to Social Security tax, not Medicare tax. It is a per-employee limit, so employees whose wages remain below the cap will have Social Security tax calculated on their wages throughout the year.

The Social Security Administration publishes the annual contribution and benefit base. Use the 2027 figure when checking your payroll system’s annual wage cap.

What to do: Confirm your payroll software will apply the $192,300 Social Security wage base and 6.2% employer rate for 2027.

5. Confirm your federal deposit schedule

Your federal payroll tax deposit schedule for 2027 depends on your lookback period. For most employers filing Form 941, that period is July 1, 2025 through June 30, 2026. Add the employment tax liabilities reported for those four quarters.

• If the total is $50,000 or less, you are generally a monthly schedule depositor.

• If the total is more than $50,000, you are generally a semiweekly schedule depositor.

The deposit schedule is based on reported tax liability, not how often you pay employees. A separate next-day deposit rule may also apply if you accumulate $100,000 or more in tax liability on a single day. Employers filing Form 944 follow a different lookback rule, so check the IRS deposit requirements that apply to your filing type.

What to do: Review the four Form 941 quarters in the lookback period and confirm your 2027 deposit schedule before making deposits under the new year’s rules.

A simple January payroll checklist

Here’s a quick way to bring the main updates together:

1. Enter Washington’s $17.73 minimum wage and check local rates.

2. Review exempt employee salaries and duties under the 2027 state thresholds.

3. Enter the confirmed 2027 PFML rate of 1.2% with the 29.3% employer / 70.7% employee split.

4. Confirm the $192,300 Social Security wage base and employer rate.

5. Verify your federal deposit schedule using the correct lookback period.

A brief review now can help keep paychecks, tax deposits, and employee records consistent when the calendar turns. Keep a note of the settings you update, along with the source and effective date. That gives you a clear record to refer to later.

None of this needs a crisis response. It needs a quiet afternoon with your payroll settings. That is exactly the kind of practical, step-by-step work I help clients make manageable. You can learn more about Jenni’s Business Services or get in touch if you’d like support keeping your books and payroll records in order.