The Minnesota Paid Leave Program has set the payroll tax rate for the upcoming Paid Family & Medical Leave (PFML) program at 0.88%. This rate, determined through a third-party actuarial analysis, marks a 46% increase from the initially proposed rate of 0.6% in 2023. The program allows employers to transfer up to half of this tax burden, equating to 0.44%, onto employees.
To assist with cost estimation, the Paid Leave Program has introduced a payroll tax calculator for employers and employees. It is important to note that this tool offers only an unofficial estimate as actual tax liabilities will be calculated based on specific wage details reported to the program.
The deadline for the first payroll tax payments is set for April 30, 2026, covering wages reported between January 1 and March 31, 2026. Starting from January 1, 2026, employers can begin deducting the employee portion of this payroll tax directly from paychecks.
NFIB Minnesota continues its efforts to advocate for adjustments that could lessen the financial impact on small businesses.
