Not income tax, not FICA
What the Oregon payroll tax is
When people say \u201cOregon payroll tax\u201d they usually mean the two payroll line items that sit between FICA and income tax on a pay stub:
- Statewide Transit Tax (STT) \u2014 0.1% of wages, no cap.
- Paid Leave Oregon \u2014 0.6% of wages up to a $184,500 annual cap.
For the median worker that is 0.1% + 0.6% = 0.7% of gross pay \u2014 $7 of every $1,000. Both are employee-paid deductions withheld by your employer, so you never file a return for them.
The transit slice
The Statewide Transit Tax (0.1%)
The STT is a flat 0.1% on all taxable wages paid in Oregon \u2014 $1 of every $1,000, with no earnings cap. It funds transit, roads, and multimodal projects across the state via the Statewide Transportation Improvement Fund.
- $50,000 salary \u2192 $50 a year (~$1.92 per biweekly check)
- $100,000 salary \u2192 $100 a year
- $200,000 salary \u2192 $200 a year
- $300,000 salary \u2192 $300 a year
It looks small line by line, but it never stops scaling, so high earners contribute proportionally more than they do to the capped Paid Leave fund.
The leave slice
Paid Leave Oregon (0.6%)
Paid Leave Oregon is a 0.6% employee premium on wages up to a $184,500 cap for 2026, so the most you ever contribute is $1,107 a year. The premium is split with employers, and the employee share appears as a deduction on your stub.
- $50,000 salary \u2192 $300 a year
- $100,000 salary \u2192 $600 a year
- $150,000 salary \u2192 $900 a year
- $200,000 salary \u2192 capped at $1,107 (0.6% of the $184,500 cap)
Wages above $184,500 escape the tax entirely \u2014 a cap that quietly makes Paid Leave mildly regressive at the top, since a $500,000 earner pays the same $1,107 as someone earning $184,500.
Where it goes
What it pays for
Paid Leave Oregon funds paid family and medical leave: up to 12 weeks (plus up to 4 weeks for prenatal care) of partially-paid leave for pregnancy, family caregiving, and your own serious medical condition. Benefits are wage-based \u2014 the more you pay in, the higher your weekly benefit, capped at 100% of the state average weekly wage.
The Transit Tax flows to the Statewide Transportation Improvement Fund, which distributes to ODOT and local agencies for highways, transit service, and active-transportation projects \u2014 the same program that funds the new Portland-to-Bend intercity route and the statewide transit expansion.
The combined bill
What you pay by income
| Gross | Transit (0.1%) | Paid Leave (0.6%) | Combined |
|---|---|---|---|
| $50,000 | $50 | $300 | $350 |
| $100,000 | $100 | $600 | $700 |
| $150,000 | $150 | $900 | $1,050 |
| $200,000 | $200 | $1,107 | $1,307 |
| $250,000 | $250 | $1,107 | $1,357 |
| $300,000 | $300 | $1,107 | $1,407 |
Because only the Transit Tax keeps scaling, the combined rate drifts down from a flat 0.7% for most earners toward 0.6% at very high incomes. Run your own numbers in the take-home pay calculator, which itemizes both line items.
The different taxes
Payroll tax vs. Oregon income tax
It\u2019s easy to confuse the payroll tax with Oregon income tax, but they are separate:
- Oregon income tax \u2014 4.75\u20139.9% on your base wage, filed on OR-40, subject to the kicker.
- Payroll taxes \u2014 flat 0.7% combined, never filed, not part of your income-tax refund or kicker.
A $100,000 single filer pays roughly $7,147 in Oregon income tax but only $700 in combined payroll tax \u2014 the income tax is more than ten times larger, and it\u2019s the one the brackets and deductions shape. The payroll tax is the boring, flat part that\u2019s easy to miss.