DC · Payroll tax 2026
The true cost of hiring in District of Columbia
Estimate what a W-2 employee costs in District of Columbia and compare it with a 1099 contract using sourced 2026 payroll-tax defaults that you can adjust to your assigned rate.
Estimate a District of Columbia hire
Pre-filled with a 2.7% base new-employer rate. Adjust SUI, salary, benefits, and the 1099 rate to fit your hire.
Results update instantly. Your values stay in this browser.
A W-2 hire in District of Columbia costs more than salary. Employers pay federal FICA and FUTA plus state unemployment insurance. For 2026, HiringMath uses a 2.7% base new-employer rate on the first $9,000 of wages, producing up to about $243 of state UI tax per worker before experience-rating or account-specific adjustments. District of Columbia taxes wage income, which creates a withholding obligation but is not an employer-paid tax. Paid Family Leave employer tax 0.75%; 0.2% admin assessment. The calculator below combines those statutory items with editable benefits, workers' compensation, and overhead, then compares the result with a 1099 contract.
District of Columbia employer tax facts
| Item | DC |
|---|---|
| Base new-employer SUI rate | 2.7% |
| SUI taxable wage base | $9,000 |
| Federal FICA (employer) | 7.65% |
| FUTA | 0.6% |
| State income tax on wages | Yes |
| Worker classification test | ABC test |
Extra employer taxes: Paid Family Leave employer tax 0.75%; 0.2% admin assessment.
- Paid Family Leave — 0.75% employer tax on total wages.
- PFL administrative assessment — 0.2% on SUI-taxable wages.
Example: a $75,000 hire in District of Columbia
At a $75,000 base salary with typical benefits, a W-2 employee in District of Columbia costs an employer $99,903 per year — $24,903 above base pay. An equivalent 1099 contract at $75,000 would cost $24,903 less; the breakeven contract rate is $99,903.
Misclassification risk in District of Columbia
Test: ABC test
ABC test; double back-pay damages under Wage Theft Prevention Act.
Penalties by stateCompare nearby rates
District of Columbia's 2.7% new-employer SUI rate sits near Alabama (2.7%), Florida (2.7%), Kentucky (2.7%), Michigan (2.7%). See the full 51-state comparison or the 2026 employer payroll tax reference.
Common questions
District of Columbia hiring-cost FAQ
What SUI rate does HiringMath use for District of Columbia?
The calculator starts with a 2.7% base new-employer rate, applied to the first $9,000 of each employee's 2026 wages. Your assigned rate can differ because of industry, surcharges, and claims history, so replace the default with the rate on your state notice when available.
Does District of Columbia have a state income tax?
Yes. District of Columbia taxes wage income. Employers withhold it from employee pay, but it does not directly increase the employer's payroll-tax cost.
What should employers know about worker classification in District of Columbia?
ABC test; double back-pay damages under Wage Theft Prevention Act. This is a planning summary, not legal advice; confirm classification decisions with the relevant agency or counsel.