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August 8, 2023

Salem, Oregon enacts new Safe Salem payroll tax; petition underway to immediately refer the tax to Salem voters

UPDATE: On August 14, 2023, the City of Salem announced that sufficient signatures were collected to place the Safe Salem payroll tax on the November 2023 ballot, leaving voters to decide if the tax will be imposed.

On July 10, 2023, the Salem City Council passed Ordinance Bill No. 12-23, which, effective July 1, 2024, creates a new Safe Salem payroll tax of 0.814% on wages and self-employment income earned within the city limits. The tax on wages applies only to employees earning more than the minimum wage.

No later than July 1, 2031, the payroll tax will be referred to voters, and if sufficient votes are not obtained, the tax ends effective December 31, 2031.

Revenues from the Salem payroll tax will address a budget deficit of $19.4 million that is anticipated by fiscal year 2028. (Safe Salem Payroll Tax, frequently asked questions.)

Oregon Business & Industry (OBI) announced that it filed a petition on July 14, 2023, to add the Salem payroll tax to the city's November 2023 ballot.

Ernst & Young LLP insights

Salem adds to the many Oregon local payroll taxes already in place that fund myriad services including transit, community safety, supportive housing and preschool.

The variations in these payroll taxes can pose compliance challenges for employers. Accordingly, employers should carefully review the requirements that apply to the Oregon local payroll taxes that apply to them.


Contact Information
For additional information concerning this Alert, please contact:
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (
   • Kenneth Hausser (
   • Debera Salam (

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor