No Income Tax, But Washington Still Withholds From Your Check
Washington has no personal income tax, yet "no income tax" does not mean "no state deductions." Two mandatory programs come out of Washington paychecks: the WA Cares Fund (long-term care) and Paid Family and Medical Leave. Neither is an income tax, but together they reduce take-home pay in ways most relocation calculators miss. A worker comparing a Washington offer to a Texas or Florida one should know that Washington's stub is not quite as clean as the other two no-income-tax states.
WA Cares: 0.58% of Every Dollar, With No Cap
The WA Cares Fund premium is 0.58% of gross wages, paid entirely by the employee, and unlike Social Security it has no wage ceiling. On a $120,000 salary that is $696 a year; on $300,000 it is $1,740. The program funds a long-term-care benefit, and the only chance to opt out was a narrow window in 2021-2022 with private coverage, so most workers now pay it on every dollar they earn. It appears as its own line, separate from federal withholding.
Paid Family and Medical Leave Premiums
Washington also funds Paid Family and Medical Leave through a payroll premium. For 2026 the total premium is 1.13% of wages up to the Social Security cap ($184,500), and employees pay up to 71.43% of it, roughly 0.81% of your wages, or about $969 on a $120,000 salary. Combine that with WA Cares and a $120,000 earner pays around $1,665 a year in state payroll premiums, even though Washington has no income tax. It is still far less than the income tax would be in a high-tax state, but it is not zero.
The Capital Gains Catch for Investors
Washington enacted a tax that surprises people who moved for the no-income-tax reputation: a 7% excise tax on long-term capital gains above a standard deduction of $278,000 for 2025 (inflation-adjusted from a $250,000 base), rising to 9.9% on gains over $1 million. It does not touch your wages, retirement accounts, or real estate sales, but a founder or executive selling concentrated stock or a business can owe a substantial bill. For high-net-worth households, this is the real asterisk on Washington's tax-friendly image.
What Washington Workers Actually Keep
Net it out: a Washington paycheck is bigger than in an income-tax state, but smaller than the WA Cares plus PFML premiums suggest at first glance, roughly $1,665 a year at $120,000 before federal tax and FICA. Property tax is moderate at about 0.87% of home value, and there is no local income tax. The no-income-tax advantage is real, especially for high W-2 earners, but Washington is the one no-tax state where the pay stub deserves a closer read. Compare it directly with other states using our State Tax and Housing Comparison tool.
How the Capital Gains Tax Survived the Courts
Washington's 7% tax on long-term capital gains is the state's most contested recent change. The legislature passed it in 2021, effective for 2022, and opponents immediately challenged it as a disguised income tax, which the state constitution makes very hard to levy. In March 2023 the Washington Supreme Court upheld it as an excise tax rather than an income tax, and a 2024 ballot initiative to repeal it failed, so it is settled law. Beginning with the 2025 tax year the rate is tiered: 7% on gains above the standard deduction (about $278,000 for 2025, indexed annually), plus an extra 2.9% on gains over $1 million, for a 9.9% top rate. It applies only to long-term gains, not wages, retirement accounts, or the sale of real estate, and the return is due in the spring alongside the federal filing.
Sales and Property Tax Carry the Load
With no tax on wages, Washington leans on consumption and property. Sales tax is among the steepest in the country: the Seattle rate rose to 10.35% effective January 1, 2026, and most of the state sits well above 8%. Property tax is more moderate, around 0.87% of value, below the national norm. For a worker the practical effect is that the "missing" income tax reappears every time you buy something, so a high earner who saves keeps far more of the no-income-tax advantage than a heavy spender does. This is the trade-off to weigh when a Washington offer is compared to one in an income-tax state with lower sales tax.
Seattle's JumpStart Tax and the B&O for the Self-Employed
Two Washington wrinkles fall outside the ordinary paycheck. Seattle levies a JumpStart payroll expense tax on large employers, tied to compensation paid to highly paid employees; it is the employer's tax, not withheld from your check, but it shapes how big Seattle firms structure high-comp roles. And because Washington has no income tax, self-employed people and contractors instead owe the state Business and Occupation (B&O) tax, which is levied on gross receipts rather than profit, so even a low-margin business pays it. A freelancer moving to Washington expecting "no state tax" is often surprised by the B&O.
What a Washington Paycheck Actually Loses
Take a salary near the Washington median household income, about $94,000. There is no state income tax, but two state premiums still come out: WA Cares at 0.58% (roughly $545) and the employee share of Paid Family and Medical Leave at about 0.81% (roughly $760), so call it about $1,300 a year in state payroll deductions, plus federal income tax and FICA. That is far less than the income tax would be in California or Oregon, but it is not the clean zero that Texas or Florida offers. Use the calculator above to model your own number.
Social Security and Medicare (FICA) are federal, so they come out the same in Washington as in every other state. The main Paycheck Calculator walks through the full federal side, including the Social Security wage base and the Additional Medicare surtax.