How Oregon State Taxes Work
Oregon runs four income tax brackets, from 4.75 percent on the first slice up to 9.9 percent, one of the highest top rates in the country. The catch for most workers is that the 8.75 percent band starts at just $11,400 of taxable income for single filers, so a normal paycheck spends most of its life there. Before the rates apply, Oregon subtracts a standard deduction of $2,910 for single filers and $5,820 for married couples filing jointly, and it does something only a few states do: it lets you subtract the federal income tax you paid, up to a cap of $8,500 for 2026. After the brackets, a $256 credit per exemption comes off the tax itself.
Run a $55,000 single income through it and Oregon taxable income is about $47,900, the state income tax comes to roughly $3,596, and the effective state rate is 6.5 percent of gross pay. Your federal income tax line is close behind. Oregon is a high-tax state on income, but remember the trade-off: it's one of only five states with no sales tax at all, so nothing gets added at the register.
The Two Deductions Other Calculators Miss
Oregon paychecks carry two small statewide deductions beyond income tax, and plenty of calculators leave them off, which makes their take-home estimates too high. The first is the Statewide Transit Tax, a flat 0.1 percent of all your wages with no cap, which funds public transportation. The second is Paid Leave Oregon, where employees contribute 0.6 percent of wages up to $184,500 to fund paid family and medical leave. Together they're about 0.7 percent of your pay, roughly $31 a month on a $54,000 salary. Small, but real, and this page includes both so your number matches your stub.
Portland Area Local Taxes
Most Oregon workers pay only state tax, but higher earners in the Portland metro face more. The Metro Supportive Housing Services tax adds 1 percent on taxable income over $125,000 for single filers ($200,000 joint), and Multnomah County's Preschool for All tax adds 1.5 percent over the same thresholds, rising to 3 percent on income above $250,000 single. Stack those on the 9.9 percent state rate and a high earner in Portland can face one of the steepest combined income tax rates in the nation. If you're below $125,000, none of this touches you, and the calculator above reflects that. The employer side lives in our Oregon paystub generator guide.
Hourly Pay and the 2026 Minimum Wage
An hourly wage just gets annualized first, and Oregon's FICA and income tax apply the same way as for salary. Oregon uses three regional minimum wages that rose on July 1, 2026: $16.80 an hour in the Portland metro, $15.55 in standard counties, and $14.55 in non-urban counties, all well above the federal $7.25 floor. At $20 an hour, 40 hours a week is $800, about $41,600 a year, and a single filer at that rate with biweekly checks nets about $1,260 per check. Overtime past 40 hours pays time and a half, and every extra dollar runs through the same lines, including the transit tax and Paid Leave. If your employer offers a 401(k) or health coverage, those pre-tax deductions lower your taxable pay first.
Overtime in 2026: your overtime is withheld like normal wages all year. The federal deduction of up to $12,500 of overtime premium ($25,000 joint, through 2028) is claimed on your federal return. Oregon starts its tax from federal income, so watch the current-year Oregon instructions to see how the deduction flows through to the state. Your W-2 carries the amounts, explained in our guide to
overtime on the W-2 and code TT.
