City of Eugene, Oregon Community Safety Payroll Tax
January 5, 2021
In June 2019, the Eugene City Council passed the Community Safety Payroll Tax Ordinance (No. 20616) to provide long-term funding for community safety services. The revenue from this new tax is designed to improve safety responses, deter crime, connect people to services, help at-risk youth, support additional investigations and court services, and add jail beds to reduce capacity-based releases.
Effective January 1, 2021, all employers paying wages to employees and self-employed individuals with a physical business location inside Eugene city limits will be required to register and remit the Community Safety Payroll Tax. The payroll tax includes both an employer and employee portion, and will be in effect until December 31, 2028.
Employer Payroll Tax
Employers are responsible for paying the employer payroll tax as well as withholding and remitting the employee payroll tax for all employees with subject wages. For employers, the first-quarter return and payment will be due April 30, 2021.
Employees are taxed on all wages earned while working for an employer with a business location within the Eugene city limits, regardless of where the work is performed. Below are some specific examples:
- If an employee telecommutes from home or works at a jobsite outside of city limits, but works for an employer located within the city, their wages will be subject to the employee payroll tax.
- If an employer with a physical address in the city has one or more business locations outside the city, no tax is owed by the employer or employee for the hours worked at the non-Eugene locations, even if the employee lives within city limits.
- If an employer is located outside of Eugene but directs its employees to travel to the city to meet with clients, no employer or employee tax is owed, as the employer does not have a physical location within the city limits.
Employers can verify if their physical business address is considered within Eugene city limits here. It is important to note, city limits are not designated by zip codes, and an address that includes “Eugene” isn’t necessarily within city limits.
Employer Tax Rates
The employer payroll tax is calculated at a tax rate of 0.21% of total gross wages paid by an employer with a physical address in the Eugene city limits. For employers with two or fewer employees, the tax rate is 0.0015 (or 0.15%) for the first $100,000 of wages paid.
Employee Tax Rates
The employee payroll tax is calculated on total taxable wages paid to an employee working for an employer located within the Eugene city limits.
- For an employee who earns more than $15 per hour, the tax is calculated at a rate of 0.44 % of total wages.
- For an employee who earns between $12.01 and $15.00 per hour, the tax is calculated at a rate of 0.30 % of total wages
- Employees who earn minimum wage ($12.00 per hour as of July 1, 2020) are exempt from the employee payroll tax.
The self-employment tax is calculated at a tax rate of 0.21 % of net earnings from self-employed individuals with a physical address within the Eugene city limits. For self-employed individuals with two or fewer employees, the tax rate is 0.15 % for the first $100,000 of net earnings from self-employment. The first annual return will be due April 15, 2022 or, for fiscal-year filing, the fifteenth day of the fourth month following the end of the fiscal year.
Our expert team of state and local tax professionals at Geffen Mesher is ready and prepared to help navigate these changes for your business and can be reached at SALT@gmco.com.