Hiring your first employee in Oregon

What do you have to register for before your first payroll?

Oregon runs one combined payroll system. A single Business Identification Number, opened through Revenue Online or the paper Combined Employer's Registration (Form 150-211-055), covers withholding, the statewide and district transit taxes, unemployment insurance, Paid Leave Oregon and the Workers' Benefit Fund assessment, and all of them are reported quarterly on one Form OQ. Two things sit outside it: the workers compensation insurance policy itself, which you buy from a private insurer, and Secretary of State foreign qualification. Register before you issue any paycheck, and start early, because Revenue quotes up to 30 business days to process an online registration and up to 60 for the paper form. Your Business Identification Number is not the registry number the Secretary of State gave you, and the agencies will not accept one in place of the other.

Does Oregon require income tax withholding?

Yes. You register with the Oregon Department of Revenue, before you issue any paycheck to an oregon employee.

You withhold Oregon income tax from a nonresident employee for services performed in Oregon unless their Oregon earnings for the year will fall under the standard deduction for their filing status, which is $2,910 for a single filer in 2026. Three other things ride along and catch new employers out. The statewide transit tax is 0.1% (0.001) withheld from wages for work performed in Oregon, and the employer is the taxpayer, although a nonresident employer that does not conduct business in Oregon is not required to withhold it and the employee then owes it directly. The TriMet rate of 0.8237% and the Lane Transit District rate of 0.80% are employer-paid taxes on wages for work inside those boundaries, not deductions from the employee. Separately, if an employee working in the Portland area earns $200,000 or more in the year you must withhold the Metro Supportive Housing Services and Multnomah County Preschool for All personal income taxes and register for those with the Portland Revenue Division, which is a city account and not part of the state combined report. Oregon also expects an employer with no retirement plan of its own to facilitate OregonSaves.

What unemployment insurance does Oregon charge a new employer?

A new Oregon employer pays 2.4% on the first $56,700 each employee earns, so roughly $1,361 per employee in the first year. A new employer, meaning one with less than 12 months of reported payroll, pays a base rate of 2.4% on the first $56,700 of each employee's wages in 2026. Oregon stays in Tax Schedule 3 for 2026, so experience-rated employers run from 0.9% to 5.4%. The wage base rose 4.4% from $54,300 in 2025 and is recalculated from the state average wage every January, so this is the figure most likely to be stale. You become a subject employer once your total payroll reaches $1,000 in any calendar quarter, or you employ one or more people in 18 separate weeks of a calendar year, under ORS 657.025. Oregon workers contribute nothing to unemployment insurance. A special payroll tax offset, 0.135% for each quarter of 2026, is carved out of the rate you pay and must be deducted before you report contributions on federal Form 940.

Do you need workers compensation insurance in Oregon?

Yes, from your first employee. Oregon sets no headcount to reach, so there is no free window before coverage is required.

• any employer with one or more subject workers; every worker is a subject worker unless one of roughly 30 exemptions in ORS 656.027 applies

There is no free headcount in Oregon: an employer with one or more subject workers must carry a policy, and every worker is a subject worker unless one of roughly 30 exemptions in ORS 656.027 applies. You buy the policy on the open market from a private insurer, because Oregon has no monopoly state fund. Budget separately for the Workers' Benefit Fund assessment, which is not insurance and does not come from your insurer: it is 1.8 cents per hour worked in 2026, entered on Form OQ as 0.018 and reported in whole hours rather than dollars, and it covers every paid individual your policy covers plus any owner or officer you chose to cover. Because it is charged per hour, part-time and seasonal staff cost less than a percentage-of-payroll assessment would suggest, and you must track hours worked, not just wages.

How quickly must you report a new hire in Oregon?

Within 20 days of the employee's date of hire or rehire. Reports go to the Oregon Child Support Program, Oregon Department of Justice.

Report every new hire and rehire within 20 days of the hire date, through the Oregon Employer Services Portal or on the paper Oregon New Hire Reporting Form. This goes to the Department of Justice, not to Revenue or the Employment Department, so it is a separate account and a separate habit from your quarterly combined report. Oregon is broader than most states here: you also have to report newly engaged and reengaged independent contractors who give you a W-9 and are expected to work more than 20 days, which means the obligation can attach to people who never appear on your payroll.

Does Oregon have paid family leave or state disability insurance?

Paid Leave Oregon is live and paying benefits. The total contribution for 2026 is 1% of gross wages up to $184,500, split so the employee pays 60% of it (0.6% of wages) and the employer pays 40% (0.4%). Employers averaging fewer than 25 employees owe no employer share but must still withhold and remit the employee's. The trap for a company expanding into Oregon is how that count is taken: it is your whole workforce, in-state and out-of-state together, so a 60-person business hiring its first person in Oregon is a large employer from day one and owes the employer share immediately. Contributions are due for anyone whose work is performed in Oregon, which expressly includes someone working remotely in Oregon for an out-of-state employer. The wage cap tracks the Social Security taxable maximum and moves every January.

Do you need a sales tax permit in Oregon?

Oregon has no general sales tax, so there is no sales tax permit to apply for. That does not always mean nothing to register for, as the note explains.

Oregon does not have a general sales or use tax, so there is no permit to apply for, no fee, no rate to charge, no exemption certificate to collect and no return to file. An out-of-state seller shipping into Oregon still needs three things. First, the Corporate Activity Tax below is a gross receipts tax that reaches remote sellers with no Oregon location, because it keys off Oregon-sourced receipts rather than presence, and it starts as a registration duty at $750,000. Second, a few narrow transaction taxes survive and are collected at the point of sale: a flat $15 bicycle excise tax on each new bicycle priced $200 or more sold to an Oregon consumer, in store or online, and a 0.5% vehicle privilege tax on dealers selling vehicles into Oregon. Third, running the other way, Oregon issues a Business Registry Resale Certificate that an Oregon buyer can present to sellers in sales-tax states, and those sellers may accept it but are not obliged to.

Does a marketplace like Amazon or Etsy handle the tax for you?

A marketplace facilitator law exists to move the duty to collect a sales tax onto the platform, and Oregon has no sales tax to collect, so no such law applies and Amazon, Etsy or eBay remit nothing to Oregon on your behalf. Do not read that as nothing to do. Those same platform sales still count as your Oregon commercial activity for the Corporate Activity Tax, and unlike a sales tax there is no facilitator standing between you and that registration, so a marketplace-only seller can cross the $750,000 CAT registration line without ever having filed anything in Oregon.

If your sales drop, when can you stop collecting?

There is no sales tax registration in Oregon, so nothing trails after you stop selling. The equivalent problem lives in the Corporate Activity Tax instead: registration is once and permanent, since the instructions say you do not need to register again if you registered in a prior year. A year in which Oregon receipts fall back under $750,000 therefore does not close the account, and it is on you to tell the Department of Revenue you have stopped rather than simply going quiet.

Does Oregon charge a tax on revenue rather than profit?

This is the tax people miss when they hear Oregon has no sales tax, and the usual mistake is conflating its two different thresholds. You must register within 30 days of passing $750,000 of Oregon commercial activity, and failing to register costs $100 a month up to $1,000 a year even in a year when no tax is due. You must file once Oregon commercial activity reaches $1 million, and only the amount above $1 million is taxed. Before applying the rate you subtract 35% of the greater of your apportioned labor costs, counting no more than $500,000 of any one employee, or your cost of goods sold, and that subtraction is capped at 95% of commercial activity. It applies to every entity type including sole proprietorships, it is imposed on the seller rather than collected from the customer, and it is charged on receipts rather than profit, so a low-margin business can owe it in a loss-making year. Estimated payments are due quarterly if you expect to owe $5,000 or more.

Do you have to register your out-of-state company in Oregon?

$275 for a foreign LLC Application for Authority to Transact Business (Form 110) and $275 for a foreign business or professional corporation Application for Authority. Both then renew annually at $275, which is where Oregon actually stings: a domestic Oregon LLC or corporation renews for $100, so staying registered as a foreign entity costs $175 more every year, forever.

You need an Oregon registered agent with a real Oregon street address, and either a web-verifiable registry number from your home jurisdiction or an official certificate of existence issued within 60 days of delivery. Qualifying with the Secretary of State does not open any tax account: the registry number it gives you is not a Business Identification Number, and you still have to register separately with Revenue for payroll and, if you cross the threshold, for the Corporate Activity Tax.

Where these figures come from

Every number on this page was read on Oregon's own agency pages, its statute, or a current-year official form, and this record was last reviewed on 2026-09-08. Where a state's explainer page disagreed with its statute or its current form, we followed the statute or the form and said so in the relevant section, because a state's consumer-facing pages are often the last thing updated when a figure changes.

Anything we could not confirm on a primary source is left blank rather than estimated. A missing figure on this page means we could not verify it, not that it is zero.

This is general information, not legal or tax advice. Rules change and your circumstances matter. Confirm anything you are about to act on with the agency named beside it.