Eugene, OR Community Safety Payroll Tax

This article provides an overview of the Safety Payroll Tax for Eugene, Oregon.

BACKGROUND

The city of Eugene, Oregon has introduced a Community Safety Payroll Tax, which will be withheld on pay dates on or after January 1, 2021. The tax applies to businesses with addresses within the Eugene city limits. The employee and employer contributions are outlined below. 

Employee Contribution

• Employees earning Oregon’s hourly minimum wage, which is $12 (effective July 1, 2020), are exempt from the employee portion of the tax.

• Employees paid more than Oregon's $12 minimum wage and up to $15 an hour will be taxed at a rate of 0.30% of gross wages.

• Employees paid more than $15 an hour will be taxed at a rate of 0.44% of gross wages.

 

Employer Contribution

• The employer tax rate for employers with more than two employees is 0.21% of gross payroll earned within the city (Employers with a physical address in the city.)

• Employers with two or fewer employees can pay a rate of 0.15% on the first $100,000 earned within the city.

The tax will be paid quarterly and will be administered by the Oregon Revenue Department.

 

Employers with locations within and outside of the city

An employer located in Eugene that also has one or more business locations outside the city does not owe tax for payroll covering work performed outside of Eugene. Employees do not owe tax on wages earned for services performed outside of the city.

 

NEXT STEPS

Employers with locations in Eugene need to register with the city and apply for a tax ID. If you have employees who work in Eugene and have not done so already, please visit the city’s website and register for a tax ID for the new tax. The City has provided the following links below to stay up-to-date:

• Have questions or want to learn more?

  • Email MUNIRev with any questions or call 541-682-5053.

  • Read the Community Safety Payroll Tax Ordinance or Administrative Order 44-20-05-F.

• Join the Payroll Tax Interested Parties email list to get updates on the payroll tax.

  • Monitor your mailbox as information will be sent to local employers.

We have added this tax to Namely Payroll, under Company > Tax. We recommend adding your company's tax ID as soon as possible so that Namely can collect and remit your taxes in a timely manner.

While Namely cannot advise on the levels of contribution that would apply to your organization, note that the City of Eugene website encourages defaulting to a tax rate of 0.21% even for companies with two or fewer employees, with any reconciliation/overpayment being addressed in Q4:
You will use the tax rate of .0021 for the first three quarters and reconcile on the 4th quarter return (or final return) if you qualify for the reduced tax rate using the worksheet on Form EUG-RTR. The difference will be used to reduce the tax due for the 4th quarter (or final return). If there is an overpayment, the overpayment will be applied as a credit (or prepayment) for the next quarter or you can request a refund on Form EUG-PY-1.
 

FREQUENTLY ASKED QUESTIONS

When is the effective date of these taxes?

Withholding for the employer and employee portion of the tax began on pay dates on or after January 1, 2021.

Do I need to apply for a new tax ID?

Yes. If you have employees who work in Eugene and have not done so already, please visit the city’s website and register for a tax ID for the new tax.

What is the format of this tax ID?

The format of the tax ID has not yet been determined. However, if you have employees who work in Eugene and have not done so already, please visit the city’s website and register for a tax ID for the new tax.

Where can I enter my tax ID once I have it?

Once you have your tax ID, navigate to the Company > Tax page in Namely Payroll and add your tax ID.

If I don’t have my tax ID entered and I process a payroll, will Namely collect for the tax?

No. If you have a tax ID that is in "Applied for" status and you process a payroll where this tax is calculated, Namely will not collect for the tax. We recommend that you add your tax ID as soon as possible.

How often are these taxes remitted?

These taxes are remitted on a quarterly basis.

I have employees who work for my organization in another location outside of Eugene, OR. Will the employee or our organization owe taxes on those wages?

No. An employer located in Eugene that also has one or more business locations outside the city will not owe tax for payroll covering employee work performed outside of Eugene. Employees will not owe tax on wages earned for services performed outside of the city.