tl;dr: If you employ people in Washington state, there’s a public hearing on January 22 for HB 2100—a proposed 5% payroll tax on wages above $125K. This would directly impact hiring costs and workforce planning for mid-to-large employers.
What’s Being Proposed
House Bill 2100, called the “Well Washington Fund,” would create a new statewide payroll expense tax:
- Rate: 5% on wages exceeding $125,000
- Who pays: Employers with 50+ employees, $7M+ payroll, and $5M+ in gross receipts
- Scope: Approximately 4,300 businesses across Washington
- Exception: Seattle employers already paying the JumpStart payroll tax would be exempt
- Revenue: Expected to generate over $2 billion annually
Why This Matters for Your Business
If you’re running a growth-stage company or employ skilled professionals in Washington, this isn’t abstract policy—it’s a line item on every future hire.
Real-world impact:
- Hiring a software engineer at $150K would trigger $1,250 in additional annual tax
- Senior roles, executive compensation, and equity-heavy packages get hit hardest
- Combined with existing payroll taxes (family leave, long-term care), total burden could approach 11.5% on high-earner wages
This changes the math on:
- Where you locate new roles
- How you structure compensation (salary vs. bonus vs. equity)
- Whether marginal hires pencil out financially
- Competitive positioning against employers in other states
The Deadline is Wednesday, January 22
There’s a narrow window to make your voice heard:
Public Hearing: January 22, 2026 at 1:30 PM
House Committee on Finance
How to participate:
- Submit written testimony through the Washington State Legislature website
- Sign in to testify (in person or remotely)
- Attend the hearing in Olympia or join virtually
The legislative session runs only 60 days (through March 12), so timing matters.
My Take
I’m not telling you which side to take—that’s your call based on your values and business realities. But I do think employers should be at the table when decisions like this are made.
If this tax pencils out as good policy for Washington, great. If it creates unintended consequences for hiring and growth, legislators should hear that too—from people actually running payroll.
Either way, showing up matters.
What are you planning to do? Drop a comment or reach out—curious to hear how other Washington employers are thinking about this.
Disclaimer: I’m not a lobbyist or tax advisor. This is just info-sharing among people navigating the same challenges. Do your own research and consult professionals as needed.
