Glossary · Payroll & taxes

Work Opportunity Tax Credit (WOTC)

A federal tax credit available to employers that hire individuals from specified target groups facing barriers to employment.

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Entravia EditorialPublished April 27, 2026

WOTC credits range from $1,200 to $9,600 per qualifying hire, depending on target-group category and hours worked. Pre-screening (Form 8850) must be submitted within 28 days of the hire start date.

Many PEOs offer WOTC screening as part of onboarding, capturing credits that small employers commonly leave on the table.

Related terms

FICA (Federal Insurance Contributions Act)
Federal payroll tax funding Social Security (6.2% each on employer and employee, up to the wage base) and Medicare (1.45% each, no wage cap).

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