Colorado Paid Family and Medical Leave Insurance (FAMLI)

Background 

The state of Colorado’s Paid Family and Medical Leave Insurance (FAMLI) program became effective in 2023. Employees and, if applicable, employers fund the paid family leave program. All employers are responsible for withholding premiums from employee wages. Employers with 10 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 Colorado’s Department of Labor and Employment’s FAMLI Division. 

Effective 1/1/2024, the wages for Colorado PFML rules were changed to be taxed on Gross Wages rather than SUTA wages in 2023. For more information, check out the Colorado Family and Medical Leave Insurance Program (FAMLI) website.

Patriot Software will calculate this tax for all payroll customers, and collect, deposit and file this tax for Full Service Payroll customers who have completed their tax service setup. 

What is the Colorado FAMLI premium?

• The total combined tax rate for 2026 is 0.88% of wages per employee.
• Employers with nine or fewer employees are not required to pay the 50% employer share (0.44%) of wages each quarter.
• Employers with 10 or more employees contribute 50% (0.44% ) of wages per employee up to the Social Security wage base. 
• Employers can decide to pay part or all of the employee share.
  • ⚠️ Starting with the 2026 tax year, Patriot will follow IRS rules that treat any excess employer PFML contributions (called “employer pick-up” wages) as taxable federal wages on employee W-2s. These amounts will be included in Boxes 1, 3, and 5, and the employer PFML pick-up amount will also be reported in Box 14.

Lookback period: To determine if you have 10 or more employees, count the number of employees (across multiple states) you have on your payroll for a total of 20 or more calendar workweeks in the preceding calendar year. If you have 10 or more employees who worked 20 or more weeks in all of 2025, you are responsible for the full 0.88% per employee.

Here’s a breakdown of Colorado FAMLI premiums:

*_{Employers can decide to pay part or all of the employee share.}

Setting up Colorado FAMLI in Payroll

You will need to answer a few questions in the payroll wizard and can find these questions under

1. Go to Settings > Payroll Settings > Paid Family and Medical Leave > Colorado tab.

2. Are you required to pay the 50% employer share of the CO FAMLI contribution?

• Choose “Yes” if you have 10 or more employees. You are required to contribute the employer share of the premium.
• Choose “No” if you have fewer than 10 employees. You are not required to contribute the employer share of the premium. 

In either case, you must still collect and remit the employees’ share of premiums and meet reporting requirements. 

IF YES–> If you select “Yes,” you will be asked, “Do you want to pay more than the minimum required employer share?” 

• If you want to pay more than the 50% employer share of 0.88%, select “Yes.” Then, choose your desired percentage of employer and employee contributions and click “Save.”
• If you want to pay the 50% employer share of 0.88% (i.e., 0.44%) per employee, select “No” and click “Save.”

IF NO –> If you select “No, I am exempt,” enter the effective date and exemption reason:

• Less than 10 employees
• Approved Alternative

You will be asked, “Do you want to pay a portion of the employees’ contribution?” 

• Select “Yes,” if you want to pay part of your employees’ 0.44% tax rate. Then, choose your desired percentage and click “Save.”
• Select “No,” if you do not want to pay any part of the employee’s share and click “Save.”

All changes will be logged at the bottom of the Colorado FAMLI page.

Marking Exemptions for Colorado FAMLI

Unless you have an approved alternative plan, all employers and most employees must participate in the Colorado FAMLI program. Churches and other nonprofits are not automatically exempt; there is not exemption for clergy or ministers.

Marking a Company Exempt from CO FAMLI

If you have an approved alternative plan, you can mark your business as exempt from withholding Colorado Paid Family and Medical Leave Insurance from all employee wages.

If you do have an approved alternative plan, you can mark your business as exempt. To mark your business as exempt:

1. Go to Settings > Payroll > Paid Family Leave > Colorado
2. Select “No, I am exempt” when asked, “Are you required to pay the 50% employer share of the CO FAMLI contribution?”
3. Select the exemption reason: Less than 10 employees or Approved Alternative and the effective date.
4. Proceed with answering contribution questions as listed above in Setting up Colorado FAMLI in Payroll
5. Click “Save.”

Your answers will be recorded at the bottom of the page each time a change is made.

Individual employee exemption from CO FMLI

To mark an employee exempt,

1. go to Payroll > Employee List > Select Employee Name > Advanced Tax Settings > Colorado Paid Family and Medical Leave Insurance (CO FMLI) 
2. Click the “Add CO FAMLI Exemption Status” button
3. Select “Exempt.”
4. Add the date the exemption began
5. Click “Save.”

This will prevent the employee and corresponding employer’s share of tax from calculating for this particular employee.

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