What hourly rate does a Washington freelancer need in 2026?
Hourly rate needed in Washington by take-home pay
30 billable hours a week, 4 weeks off, $500 a month of business expenses, no health insurance or retirement savings, tax year 2026.
| Take-home pay | Single | Married filing jointly | Tax share (single) |
|---|---|---|---|
| $50,000 | $48/hr | $47/hr | 18.4% |
| $75,000 | $71/hr | $69/hr | 20.8% |
| $100,000 | $97/hr | $92/hr | 23.5% |
| $150,000 | $148/hr | $140/hr | 26.7% |
| $200,000 | $203/hr | $185/hr | 29.4% |
Washington income tax for freelancers in 2026
Washington has no personal income tax on wages or self-employment income in 2026.
Washington does not levy a personal income tax on wages or self-employment income. Freelancers there pay federal income tax and the 15.3% self-employment tax only.
How the calculator handles Washington
- Washington has no personal income tax on wages or self-employment income for tax year 2026.
- ESSB 6346 (Chapter 238, Laws of 2026) enacts a 9.9% tax on Washington taxable income above a $1,000,000 per-individual standard deduction beginning January 1, 2028 (first returns/payments in 2029); it does not apply to 2026. Initiative 2111 (2024) prohibiting personal income taxes was cited in the bill report; the new tax may face legal challenge.
- Washington's capital gains excise tax on long-term capital gains is not modeled (irrelevant to ordinary freelance income).
- Washington instead taxes gross receipts via the business and occupation (B&O) tax; see businessCosts. The calculator models service-and-other-activities B&O at 1.5% of gross receipts (treated as a deductible business expense) with the small business B&O credit computed annually: maximum $160 x 12 = $1,920; when B&O tax exceeds that, credit = 2 x $1,920 - tax, reaching $0 at $3,840 of tax (RCW 82.04.4451; DOR credit 720 table). Monthly or quarterly filers compute the credit per period, so actual results can differ slightly. Retail sales tax and local B&O taxes are not modeled.
- ESSB 5814 (effective October 1, 2025) made several services retail sales subject to sales tax and retailing B&O (not service B&O): IT services, custom software/website development, technical support, temporary staffing, advertising services, live presentations, investigation/security. Freelancers in those fields collect sales tax and pay the 0.471% retailing B&O rate instead of the service rate.
Local income taxes in Washington
No local income taxes. Some cities (e.g. Seattle, Tacoma, Bellevue) impose their own local B&O taxes and business license fees, which are not modeled.
Washington estimated tax payments
- Who must pay: Not required. None: Washington has no personal income tax, so there are no state estimated income tax payments. B&O tax is paid on the excise tax return on the filing frequency DOR assigns (annual, quarterly or monthly).
- Safe harbor: Not applicable (no personal income tax).
- Form: None (B&O tax is reported on the Combined Excise Tax Return via My DOR)
Federal estimated payments follow their own schedule. Work them out with the quarterly estimated tax calculator.
Business costs for a Washington freelancer
| LLC formation fee | $180 (Certificate of Formation / original filing, Washington Secretary of State); optional expedited service $100 extra. A separate Business License Application with DOR is required (processing fee varies). |
|---|---|
| Annual report | $70 per year (annual report for LLCs, Secretary of State); $95 if filed late with delinquency fee; $10 initial report. |
| Franchise or minimum tax | None (no franchise tax or minimum tax; no corporate or personal income tax). |
| Gross receipts tax | Business & Occupation (B&O) tax on gross receipts. Service & Other Activities classification, effective Oct 1, 2025 (ESHB 2081, Chapter 420, Laws of 2025): 1.5% if the business (with affiliates) had less than $1,000,000 of such taxable income in the prior calendar year; 1.75% for $1,000,000 to $4,999,999.99; 2.1% for $5 million or more (hospitals and certain advanced computing businesses stay at 1.5%). Small Business B&O Credit (credit 720, for businesses with 50%+ of income under Service & Other Activities): up to $160 per month of the reporting period, phasing out dollar-for-dollar as B&O tax due rises above $160, fully gone when tax due exceeds $320/month (annual filers: credit ends above $3,840 of B&O tax; roughly the first ~$125,000 of service income is tax-free, fully phased out around $250,000). Registration/business license required if gross income is $12,000 per year or more; businesses with under $125,000 of gross income across all B&O classifications (and no retail sales tax collection or other DOR tax) may qualify for active non-reporting status. Annual filing for estimated tax liability of $1,050 or less. ESSB 6346 (2026) raises the service credit to $375/month and the annual filing threshold to $250,000 starting January 1, 2029 (not 2026). |
You don’t need an LLC to freelance as a sole proprietor. Compare the tax treatment in LLC vs sole proprietor for freelancers.
What else a Washington freelancer deals with
B&O tax on service income uses tiered rates
Washington's business and occupation (B&O) tax is charged on gross receipts, not profit. The Department of Revenue's special notice of July 25, 2025 sets the Service and Other Activities rate from October 1, 2025. The rate is 1.5% when prior-year taxable income in that classification was under $1 million. It is 1.75% from $1 million to $4,999,999.99 and 2.1% at $5 million or more. The tier is measured for the business or its affiliated group. (source 1, source 2)
Small business B&O credit
For filing periods starting on or after January 1, 2023, the maximum small business B&O credit is $160 per month for businesses that report 50% or more of their income under Service and Other Activities. It is $55 per month for other classifications. Electronic filing applies the credit automatically, and it cannot exceed the B&O tax due. The Department's 2026 legislation summary says ESSB 6346 (Chapter 238, Laws of 2026) increases this credit. (source 1, source 2)
When an excise tax return is not required
Under the Department's active non-reporting rules for calendar years from 2023, a business may skip filing excise tax returns if its gross income across all B&O classifications is under $125,000 a year. It must also not be required to collect retail sales tax and must owe no other tax or fee to the Department. The Department's income tax FAQ says ESSB 6346 raises the threshold to $250,000 for businesses that do not collect retail sales tax or public utility tax. (source 1, source 2)
State business license
The Department of Revenue lists conditions that require a Washington business license through its Business Licensing Service. They include gross income of $12,000 or more a year, plans to hire within 90 days, and using a name other than the owner's legal name. Others are needing city, county or state endorsements, or selling a service that requires collecting sales tax. The Department says the application fee varies, and each endorsement carries its own fee. (source)
Sales tax now applies to many IT, web and advertising services
Under ESSB 5814, from October 1, 2025, retail sales tax applies to IT services, custom website development, custom software and customization of prewritten software. IT services include help desk, network support, training, consulting, data entry and data processing. Advertising services, live presentations, investigation and security services, and temporary staffing are also covered. Income from the IT, website and software services is now taxed under the Retailing B&O classification (0.471%). From July 1, 2026, some live presentations are excluded. (source 1, source 2, source 3)
Seattle city B&O tax
From January 1, 2026, Seattle's B&O tax threshold rose from $100,000 to $2 million in gross receipts, and a $2 million standard deduction applies above it. Businesses under the threshold still file an annual return, even when revenue is zero. The 2026 rate for Service and Other Business Activities is 0.658%. Seattle's business license tax certificate is separate from the B&O tax and is renewed by December 31 each year. (source 1, source 2)
Frequently asked questions
Does Washington have a state income tax on freelance income?
No. Washington does not tax wage or self-employment income, so freelancers there pay federal income tax and self-employment tax only. Business taxes can still apply: Business & Occupation (B&O) tax on gross receipts. Service & Other Activities classification, effective Oct 1, 2025 (ESHB 2081, Chapter 420, Laws of 2025): 1.5% if the business (with affiliates) had less than $1,000,000 of such taxable income in the prior calendar year; 1.75% for $1,000,000 to $4,999,999.99; 2.1% for $5 million or more (hospitals and certain advanced computing businesses stay at 1.5%). Small Business B&O Credit (credit 720, for businesses with 50%+ of income under Service & Other Activities): up to $160 per month of the reporting period, phasing out dollar-for-dollar as B&O tax due rises above $160, fully gone when tax due exceeds $320/month (annual filers: credit ends above $3,840 of B&O tax; roughly the first ~$125,000 of service income is tax-free, fully phased out around $250,000). Registration/business license required if gross income is $12,000 per year or more; businesses with under $125,000 of gross income across all B&O classifications (and no retail sales tax collection or other DOR tax) may qualify for active non-reporting status. Annual filing for estimated tax liability of $1,050 or less. ESSB 6346 (2026) raises the service credit to $375/month and the annual filing threshold to $250,000 starting January 1, 2029 (not 2026).
Do freelancers in Washington pay state estimated taxes?
No. Washington does not require state income tax estimated payments. None: Washington has no personal income tax, so there are no state estimated income tax payments. B&O tax is paid on the excise tax return on the filing frequency DOR assigns (annual, quarterly or monthly).
Sources for Washington figures
Verified October 22, 2026 against official Washington and IRS publications.
- WA DOR – Business & occupation tax classifications (rates)
- WA DOR – Special notice: Service and Other Activities rate changes (ESSB 2081)
- WA DOR – 2025 Tax legislation
- WA DOR – Business & occupation tax overview
- WA DOR – Tax credits (Small Business B&O Tax Credit)
- WA DOR – Filing frequencies & due dates (active non-reporting)
- WA DOR – Apply for a business license ($12,000 threshold)
- WA Legislature – Final Bill Report ESSB 6346, C 238 L 26
- WA Secretary of State – Fee Schedules & Priority Services
- RCW 82.04.4451 – Small business B&O credit (maximum credit, phase-out formula)
- Business and occupation tax credit increase for small businesses - Washington Department of Revenue
- Active non-reporting - Washington Department of Revenue
- Services newly subject to retail sales tax - Washington Department of Revenue
- Information technology, website, and software development services now subject to sales tax - Washington Department of Revenue
- 2026 Tax Legislation - Washington Department of Revenue
- Frequently asked questions about income tax - Washington Department of Revenue
- Business License Tax - City of Seattle License and Tax Administration
- Tax Rates and Classifications - City of Seattle Finance
Estimates for educational and planning purposes only. HourFloor does not provide tax, legal or financial advice. Verify your numbers with a qualified tax professional.