Eugene Community Safety Payroll Tax

The Eugene City Council passed the Community Safety Payroll Tax Ordinance (No. 20616) in June  2019  to provide  long-term  funding for community safety services. The Community Safety Payroll Tax is expected to generate $23. 6 million annually to provide faster, more efficient safety responses, deter crime, connect people to services, engage and help  at-risk  youth , support more investigations and court services, and add jail beds to reduce  capacity-based  releases and hold those who commit crimes accountable. This tax is effective January 1 , 2021.

More detailed information can be found on the agency website here.

Setup

There are two aspects to the calculation of this new tax:  employee withholding and employer liability.  
Employee level calculations will be based on customer subjectivity settings on the taxes tab and the city’s rates.  If no selection is made, the system will default to Subject - Based in Multiple Locations.
  • Subject - Based in Multiple Locations:  This option should be selected by employers that have physical business locations within the city limits of Eugene, Oregon and in other states/cities.  If this is selected, any employee with a Eugene work location will have this tax withheld.?
  • Subject - Based in Eugene Only:  This option should be selected by employers that have physical business locations only within Eugene city limits.  If this is selected, all employees, no matter what their work location is, will have this tax withheld.?
  • Not Subject:  This option should be selected by employers that have no physical business location within the Eugene city limits.  If this is selected, no employees will be assessed the tax and the employer will not be assessed the tax.  Customers with this setting should NOT be set to Full Service.

Calculation

Calculation for the employer portion is based on the average number of people an employer employs for the year.  Employers with 2 or less EEs tax rate is .0015 on the first $100,000 of payroll.  Employers with more than 2 EEs tax rate is .0021.  The employer payroll tax is applied to total wages paid by an employer with a physical address within the Eugene city limits.

Note:  The tax for the employer portion must be withheld at the highest of the two rates until the end of the year and employers can then make adjustments on their 4th quarter return if they determine they are subject to the lower rate based on their annual employee count. See the city’s FAQ for more information.

Calculation for the employee portion is based on the city’s rate table.  Overtime wages are not used to determine the tax rate but are subject to the payroll tax.

In order to request Zenefits to file and pay this tax on your behalf, you must register and provide a  MUNIRevs  Account Number and request to be set to Full Service for this jurisdiction.

Once set to Full Service, Zenefits will debit your account for any employee withholding calculated in payroll.  Zenefits will also debit for the employer portion of the tax as part of the normal quarter end process.




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