Massachusetts Paid Family and Medical Leave
The state of Massachusetts has enacted a “Paid Family and Medical Leave” law (PFML) to provide paid leave for employees. While employees won’t be able to take leave or apply for benefits until 2021, employers are required to begin withholding payroll deductions on October 1, 2019.
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.
As of September, 2019, Patriot will collect and file this new tax for our Full Service Payroll customers. At this time, we are only able to 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.
Setting Up Massachusetts Paid Family and Medical Leave Taxes in Patriot Software
Here’s what you need to know:
- The total contribution rate is 0.75% of gross wages. This contribution is split into two parts: Between the 0.75%, 0.62% is for medical leave and 0.13% is for family leave.
- 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 are required to pay 60% of the medical leave portion of the premium.
- Employers with fewer than 25 covered individuals are not required to pay the employer 60% of the medical leave portion of the premium. Since the employer is not required to pay the employer share, the contribution rate drops to 0.378% of gross wages and is only the employee portion.
- An employer can choose to pay any or all of the employees’ share of the premium.
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:
|Company Size||Employer Share||Employee Share|
|If less than 25 Covered Individuals||Not required to pay employer share of 60% of medical leave contribution, but can choose to pay more to cover employee share||Required to withhold and collect employee share of 40% of medical and 100% of family leave|
|If 25 or more Covered Individuals||Required to pay employer share of 60% of medical leave, and can choose to pay more to cover employee share||Required to withhold and collect employee share of 40% of medical and 100% of family leave|
Marking exempt from Massachusetts Paid Family and Medical Leave
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.