Two taxes, different jurisdictions
How are the Metro SHS and Multnomah PFA taxes different?
Despite similar thresholds, these are two separate taxes levied by two different entities:
- Metro Supportive Housing Services (SHS): Levied by the Metro regional government, which covers Clackamas, Multnomah and Washington Counties. It funds homeless services and supportive housing. The 1% rate applies to taxable income above $125,000 (single) or $200,000 (joint).
- Multnomah County Preschool for All (PFA): Levied only by Multnomah County (which includes Portland proper). It funds universal preschool. The first tier is 1.5% on income above $125,000/$200,000, and a second tier of 3% applies above $250,000/$400,000.
If you live in Multnomah County and earn above the thresholds, you pay both taxes. If you live in Clackamas or Washington County (also within the Metro boundary), you pay only the Metro SHS tax, not the PFA. This geographic distinction is critical for high earners choosing where to live in the Portland metro.
What income do these taxes apply to?
Both taxes apply to Oregon taxable income, not just earned income. This is a crucial difference from most local taxes, which typically exempt investment income. The Portland-area taxes apply to:
- Wages and salaries
- Business and self-employment income
- Capital gains
- Rental income
- Interest and dividends (to the extent included in Oregon taxable income)
For a high earner with significant investment income, the combined Metro SHS + PFA tax can add 2.5% to 4% on top of Oregon's already-high 9.9% top state rate. The combined marginal rate for a Multnomah County resident earning above $250,000 can approach 14% at the state and local level alone, before federal taxes.
How do you file and pay these taxes?
Both taxes are administered by the Multnomah County Revenue Division, which handles filing for the Metro SHS tax as well as the PFA. You file a combined return through the Portland Revenue Division portal. This is separate from your Oregon state return.
Employers are required to withhold the Metro SHS tax from employee paychecks if the employee earns above the threshold. The PFA withholding applies only to Multnomah County residents. If your employer does not withhold (many smaller or out-of-area employers do not), you must make estimated payments quarterly to avoid penalties.
What if you live outside the Metro area but work in Portland?
The Metro SHS tax applies to anyone who lives within the Metro boundary (three counties) OR works within the Metro boundary. If you live outside the Metro area but work in Portland, you owe the Metro SHS tax on wages earned within the boundary. The PFA applies only to Multnomah County residents, so nonresidents commuting to Portland for work owe the Metro SHS but not the PFA.
Remote workers who live outside the Metro boundary and work from home for a Portland employer may not owe either tax, since the obligation is based on either residence or physical work location within the boundary.
How does this stack with Oregon state income tax?
Oregon's state income tax has graduated brackets with a top rate of 9.9% on income above approximately $125,000 (single). The Metro SHS and PFA taxes are on top of that. Oregon has no sales tax, which is often cited as a trade-off, but for high earners in the Portland area, the combined income tax burden is among the highest in the nation.
Why do many Portland area earners face a year-end tax surprise?
One of the most common problems with the Metro SHS and PFA taxes is that many employers do not withhold them. While withholding became mandatory for the Metro SHS tax, enforcement has been inconsistent, particularly among smaller employers and those headquartered outside the Metro area. For the PFA, withholding applies only if the employer knows the employee is a Multnomah County resident. The result is that many high earners discover they owe several thousand dollars when they file their annual return with the Revenue Division. To avoid underpayment penalties, affected taxpayers should make quarterly estimated payments throughout the year through the Revenue Division portal at portland.gov/revenue rather than waiting until the April filing deadline.
What happens if you move to the Portland area mid-year?
If you relocate into the Metro boundary during the tax year, you owe the Metro SHS tax only on income earned from your move date forward, not for the full year. The same applies to the PFA if you move into Multnomah County. You file a part-year return with the Revenue Division reporting the portion of income attributable to the months you lived within the taxing jurisdiction. If you move out of the Metro area mid-year, the obligation similarly ends at your departure date. This pro-rating is handled on the annual return, not through any mid-year adjustment by your employer.
What does the combined burden look like for a high-earning Portland resident?
Worked example: $200,000 salary, single filer, Multnomah County resident
| Tax layer | Approximate amount |
|---|---|
| Federal income tax | ~$38,500 |
| FICA (employee share) | ~$11,700 |
| Oregon state income tax (up to 9.9%) | ~$15,800 |
| Metro SHS (1% above $125K) | ~$750 |
| Multnomah PFA (1.5% above $125K) | ~$1,125 |
| Estimated take-home | ~$132,125 |
Illustrative example. Only income above the $125K threshold is subject to Metro SHS and PFA. Use our Portland take-home calculator for a personalized estimate.
For earners above $250,000, the PFA tier 2 rate jumps to 3%, making the combined Metro+PFA surcharge 4% on income above that level. Combined with Oregon's 9.9% top state rate, the total state-plus-local marginal rate can approach 14% before federal taxes. This is one of the highest combined income tax burdens in the country.
Questions
Portland metro tax FAQ
Do I pay both the Metro SHS and PFA taxes?
Only if you live in Multnomah County and earn above the income thresholds. The Metro SHS covers all three Metro counties (Clackamas, Multnomah, Washington). The PFA is Multnomah County only. Residents of Clackamas or Washington County pay only the Metro SHS.
Do these taxes apply to capital gains and investment income?
Yes. Both taxes apply to Oregon taxable income, which includes wages, capital gains, rental income, interest and dividends. This is different from most local income taxes that only tax earned income.
What are the income thresholds?
Both taxes use the same thresholds: $125,000 for single filers and $200,000 for married filing jointly. The PFA has a second tier at $250,000 single / $400,000 joint where the rate increases from 1.5% to 3%. Only income above the threshold is taxed, not your entire income.
Do employers withhold these taxes?
Employers are required to withhold the Metro SHS tax from employees who earn above the threshold. PFA withholding applies to Multnomah County residents. If your employer does not withhold, you must make quarterly estimated payments directly to the Portland Revenue Division.
Can I avoid these taxes by living outside the Metro area?
If you live outside the three-county Metro boundary and work remotely, you generally avoid both taxes. However, if you commute to a workplace within the Metro area, the Metro SHS applies to your Metro-source wages even if you live outside the boundary. The PFA applies only to Multnomah County residents.
What happens if my employer does not withhold the Portland metro taxes?
If your employer does not withhold the Metro SHS or PFA taxes, you are personally responsible for making quarterly estimated payments directly to the Portland Revenue Division. Many smaller employers and out-of-area employers do not withhold these taxes, which leads to a year-end surprise when filers discover they owe the full amount plus potential underpayment penalties. Set up estimated payments through the Revenue Division portal at portland.gov/revenue.
If I move to the Portland metro area mid-year, do I owe the full year's tax?
No. The Metro SHS tax applies to income earned while you live or work within the Metro boundary, so if you move to the area mid-year, you owe the tax only on income earned from your move date forward. The PFA similarly applies to the period of Multnomah County residence. You file a part-year return with the Revenue Division reporting only the income from the portion of the year you lived within the taxing jurisdiction.
- Sources: Portland/Multnomah Revenue Division · Metro regional government · OR Dept. of Revenue.
- Last updated July 31, 2026
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