Massachusetts Paid Family and Medical Leave

Background

The state of Massachusetts has enacted a “Paid Family and Medical Leave” law (PFML) to provide paid leave for employees. Employers are responsible for withholding premiums from employee wages. Employers with 25 or more employees must also contribute. You may be exempt from participating if you offer a private paid family leave plan to employees that has been approved by the Massachusetts Department of Revenue. 

For more information, visit the Department of Family and Medical Leave website.  

Also, see our blog article Massachusetts Paid Family Leave: Preparing for a New Program.  

Patriot Software will calculate this tax for all payroll customers, and collect, deposit and file this tax for Full Service Payroll customers. At this time, we can only file information for W-2 employees. If you pay 1099 contractors, these will not be included in the filing. You may need to file an amended return to include 1099 contractors.

How much is the Massachusetts PFL premium?

Here’s what you need to know:

• You will need to determine how many covered individuals are in your workforce. 1099 independent contractors you have paid may need to be included.
  • Employers with 25 or more covered individuals have a total 2023 contribution rate of 0.63%, split between two parts: 0.52% for medical leave and 0.11% for family leave. The medical leave rate further splits between employees and employers. Of the 0.52%, employers are responsible for contributing 60% (0.312% of eligible wages) and employees 40% (0.208% of eligible wages).
  • Employers with fewer than 25 covered individuals have a total contribution rate of 0.318%, split between two parts: 0.208% for medical leave and 0.11% for family leave. Employers are not required to pay the 60% share of the medical leave contribution. 
• An employer can choose to pay any or all of the employees’ share of the premium.
• Withholdings and contributions are capped at the Social Security wage base.

Setting Up Massachusetts Paid Family and Medical Leave Taxes in Patriot Software

As a new Patriot customer, you will need to answer a few questions in the payroll wizard.  Existing customers can find these questions under Settings > Payroll Settings > MA Paid Family and Medical Leave.

Are you required to pay the 60% employer share of the medical leave contribution?  

• If you have 25 or more covered individuals, choose “Yes.” You are required to contribute to the employer share of the premium.
• If your business has fewer than 25 covered individuals, choose “No.” You are not required to contribute the employer share of the premium.  

In both cases, you are still required to collect and remit the employees’ share of premiums and meet reporting requirements.  

Do you want to pay a portion of your employees’ premium?

The employer can choose to pay some or all of the employees’ share of medical and family leave contributions.  

As a recap, here are your responsibilities and options:

Marking exempt from Massachusetts Paid Family and Medical Leave

Company Exemption

If you have answered that you are not required to contribute the 60% employer share, you will automatically be marked as “Exempt” in the software.  If you need to change your answers after you complete the wizard, go to Settings > Payroll Settings > Massachusetts > MA Paid Family and Medical Leave and change the answers to the questions. 

Individual Employee Exemption

To mark an employee exempt, go to Payroll > Employee List > Select Employee Name > Advanced Tax Settings > PFML > Add PFML Exemption Status and change to “Exempt.”This will prevent the employee and corresponding employer share of tax from calculating for this particular employee.

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