Colorado Paid Family and Medical Leave Insurance (FAMLI)
The state of Colorado’s Paid Family and Medical Leave Insurance (FAMLI) program takes effect 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.
Begin handling FAMLI contributions on January 1, 2023. Eligible employees can begin taking benefits in 2024.
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.
How much is the Colorado FAMLI premium?
Both employees and employers with 10 or more employees contribute a FAMLI premium, split 50/50:
- The total combined tax rate for 2023 and 2024 is 0.90% per employee.
- You can withhold up to 50% of 0.9% (i.e., 0.45%) from each employee’s wages, up to the annual Social Security wage base ($160,200 for 2023). You can decide to pay part or all of the employee share.
- If you have 10 or more employees, contribute a matching 0.45% up to the Social Security wage base.
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 2022, you are responsible for the full 0.9% per employee.
Here’s a breakdown of Colorado FAMLI premiums:
|Company Size||Employer Share||Employee Share|
|If fewer than 10 employees||Not required to pay employer share. Can choose to cover part or all of employee share.||Withhold and collect employee share of 0.45%.|
|If 10 or more employees||Contribute employer share of 0.45%. Can choose to pay more to cover part or all of employee share.||Withhold and collect employee share of 0.45%.|
Setting up Colorado FAMLI 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 > Paid Family and Medical Leave.
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 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 0.9%, 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 0.9% (i.e., 0.45%) per employee, select “No” and click “Save.”
If you select “No, I am exempt,” you will be asked, “Do you want to pay a portion of the employees’ contribution?”
- If you want to pay part of your employees’ 0.45% tax rate, select “Yes.” Then, choose your desired percentage and click “Save.”
- If you do not want to pay any part of the employee’s share, select “No” and click “Save.”
Marking exemptions from Colorado Paid Family and Medical Leave
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. Or, you may have some employees who are exempt from withholding.
Here’s how to mark your company or an individual employee exempt:
Company exemption from CO FAMLI
Unless you have an approved alternative plan, all employers must participate in the Colorado FAMLI program.
If you do have an approved alternative plan, you can mark your business as exempt. To mark your business as exempt:
- Select “No, I am exempt” when asked, “Are you required to pay the 50% employer share of the CO FAMLI contribution?”
- Click “Save.”
Updating your company Colorado FAMLI exemption status
You can change your answer by going to Settings > Tax Exemptions > Colorado > Colorado Paid Family Leave and unchecking the box next to “My business is exempt from employer Colorado Paid Family and Medical Leave Insurance (CO FAMLI).”
Individual employee exemption from CO FMLI
To mark an employee exempt, go to Payroll > Employee List > Select Employee Name > Advanced Tax Settings > Colorado Paid Family and Medical Leave Insurance (CO FMLI)
Click the “Add CO FAMLI Exemption Status” button and change to “Exempt.” Add the date the exemption began and click “Save.”
This will prevent the employee and corresponding employer’s share of tax from calculating for this particular employee.
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