The flat payroll tax
What the Statewide Transit Tax is
The Statewide Transit Tax is a payroll tax on wages paid in Oregon, first withheld on January 1, 2023. It is the employee-funded side of the 2021 transportation package that also created Paid Leave Oregon \u2014 a pair of new payroll taxes that began the same day and appear together on pay stubs.
Unlike the income tax, there are no brackets, deductions, or allowances. It\u2019s a straight percentage of gross wages, withheld by your employer and remitted to ODOT through the Statewide Transportation Improvement Fund.
One rate, forever
The rate: 0.1%, no cap
The rate is 0.1% \u2014 one-tenth of one percent. In dollars: $1 for every $1,000 of wages. There is no annual cap, so the tax is flat at every income level:
- $40,000 \u2192 $40/year
- $100,000 \u2192 $100/year
- $250,000 \u2192 $250/year
- $500,000 \u2192 $500/year
Because there\u2019s no cap, the STT is the one payroll deduction that never stops growing with your income \u2014 the opposite of Social Security, Paid Leave, and the Metro SHS, which all top out.
The real cost
Cost by income
| Gross | Annual STT | Per biweekly check |
|---|---|---|
| $50,000 | $50 | $1.92 |
| $75,000 | $75 | $2.88 |
| $100,000 | $100 | $3.85 |
| $150,000 | $150 | $5.77 |
| $200,000 | $200 | $7.69 |
The take-home impact is small at every income \u2014 less than $8 per biweekly check even at $200,000. But it\u2019s permanent: unlike the income tax, nothing reduces it, and unlike the kicker, nothing refunds it.
Your money\u2019s route
Where the money goes
Revenue flows to the Statewide Transportation Improvement Fund, distributed by ODOT for:
- Transit service expansion \u2014 including the new Portland\u2013Bend intercity route.
- Highway and road projects across the state.
- Active transportation \u2014 bike and pedestrian infrastructure.
- Local transportation grants through the regional and county distribution formulas.
Unlike a fee you pay for a specific service, the STT is general transportation funding \u2014 the state\u2019s catch-all for the projects that gas taxes no longer fully cover as vehicles electrify.
Reading the stub
Finding it on your pay stub
Look for a line labeled \u201cOR STT,\u201d \u201cOR Transit,\u201d \u201cStatewide Transit Tax,\u201d or \u201cOR STIF.\u201d It\u2019s usually grouped with Paid Leave Oregon. On a $2,000 biweekly gross, the deduction is $2.00 \u2014 easy to mistake for rounding or ignore entirely. Multiply by 26 and it\u2019s $52 a year: the full bill.
If your stub doesn\u2019t show it, check whether your employer uses a combined \u201cOregon payroll taxes\u201d line that merges STT with Paid Leave \u2014 the 0.7% combined total (0.1% + 0.6%) is the most common single line.
Two \u201cOR\u201d taxes
vs. the Portland Metro SHS
Payroll systems sometimes lump both under \u201cOR\u201d deductions, but they are different taxes:
- Statewide Transit Tax \u2014 0.1%, all of Oregon, no cap, funds state transit.
- Metro SHS \u2014 1%, only the Portland Metro (Washington, Multnomah, Clackamas), capped at $250,000, funds supportive housing and shelter.
A $150,000 Portland worker pays $150 in STT and $1,500 in SHS \u2014 the Metro tax is ten times larger and far more consequential. Both appear on the same stub. See the Portland local taxes guide for the full local picture.