Human Resources

Paycheck Changes Employees Can Expect to See in January

With the new tax year comes many paycheck adjustments. Here are some of the changes employees might expect to see starting in January 2026:

Benefit deductions:

  • Employees may see different health deduction amounts than in the prior year (including for medical, Health Savings Account (HSA), Medical or Limited Purpose Flexible Spending Arrangement (FSA/LFSA) and/or Dependent Care Assistance Program (DCAP) plans), reflecting premium price differences or changes made during Open Enrollment.
  • Employees who hit their retirement savings limit earlier in 2025 will see retirement deductions restart in January 2026.
  • Employees enrolled in optional employee-paid long-term disability insurance will see lower premium deductions. Rates will decrease:
    • For UWRP participants with 60% coverage: from 0.59% to 0.50%.
    • For UWRP participants with 50% coverage: from 0.35% to 0.30%.
    • For DRS participants or employees with no retirement plan with 60% coverage: from 0.47% to 0.39%.
    • For DRS participants or employees with no retirement plan with 50% coverage: from 0.28% to 0.24%.
  • As part of the UWRP plan update, beginning with the first January paycheck:
    • Participants who either defaulted into UWRP or elected the UWRP optional period, and who have not been making contributions, will start making contributions (with a UW match); contribution amounts vary by age (<35 yrs = 5%; 35-49 yrs = 7.5%; 50+ yrs = 10%).
    • UWRP participants aged 50+ contributing 7.5% will see their retirement contributions increase to 10% (with a 10% UW match).

State and federal taxes:

  • Washington State’s Paid Family and Medical Leave Program premium rates will be increasing from 0.92% to 1.13% of the employee’s gross wages, up to $184,500 of taxable income.
  • Maximum earnings subject to Social Security tax increases to $184,500 for 2026. Employees who hit the Social Security cap in 2025 will see Social Security deductions resume in January 2026.
  • Employees who earn more than $200,000 may see a reduction in Medicare withholding in the early part of 2026; once annual wages exceed $200,000 for the year, a 0.9% Additional Medicare Tax will be withheld from wages and will be withheld each pay period until the end of the calendar year.