The Colorado PFML tax is a payroll contribution that funds the state’s Family and Medical Leave Insurance (FAMLI) program. For 2026, the combined rate is 0.88% of wages, down from 0.9% in 2023 through 2025, and it is typically split evenly between employer and employee at 0.44% each.1Family and Medical Leave Insurance. Premium and Benefits Calculator Employers report wages and remit the premium quarterly.
The 2026 Rate and Wage Cap
Premiums are calculated only on wages up to the Social Security wage base, which is $184,500 for 2026 earnings.2Social Security Administration. Contribution and Benefit Base Wages above that threshold are not subject to FAMLI premiums.
For a worker earning $60,000, the total annual FAMLI premium is $528. Split evenly, the employee pays $264 and the employer pays $264. For a worker earning $200,000, the premium applies only to the first $184,500, so the total is roughly $1,624 rather than $1,760.
The statute allows the rate to be adjusted over time, but it cannot exceed 1.2% of wages.
Who Pays the Premium
Employers with 10 or more employees split the 0.88% rate evenly with their workers. Each side pays 0.44%.1Family and Medical Leave Insurance. Premium and Benefits Calculator Employers with fewer than 10 employees are not required to pay the employer share, but they must still withhold the employee’s 0.44% and send it to the state. A small employer can choose to cover the employer portion voluntarily.
Nearly all Colorado wage earners are in. If you work for a Colorado employer, the 0.44% employee share should appear as a line item on your pay stub. Local governments are the one notable carve-out, and that is covered below.
Self-Employed Workers and Independent Contractors
If you are self-employed or an independent contractor, FAMLI is voluntary. You are not automatically enrolled, and no premiums come out of your earnings unless you opt in through the My FAMLI+ Employer portal.3Family and Medical Leave Insurance. Self-Employed Workers
Opting in is a three-year commitment. The rate is 0.44% of gross self-employment income, matching the employee share under the standard split.3Family and Medical Leave Insurance. Self-Employed Workers You can start claiming benefits once you have reported and paid premiums for at least one quarter.
Quarterly Filing Deadlines
Employers report wages and remit premiums every quarter. The deadline is the last day of the month after each quarter ends:4Family and Medical Leave Insurance. Individuals and Families FAQs
- Q1 (January–March): due April 30
- Q2 (April–June): due July 31
- Q3 (July–September): due October 31
- Q4 (October–December): due January 31
Interest and Late Penalties
The FAMLI Division charges interest at 0.66667% per month on unpaid premiums and penalties, and that interest compounds monthly on any outstanding balance.5Family and Medical Leave Insurance. My FAMLI+ Employer User Guide – Wages and Payments Late wage reports also carry a $5-per-employee penalty for each quarter reported late. New employers with fewer than 10 workers face a $25 minimum penalty per occurrence; those with 10 or more face a $50 minimum.
What the Premium Pays For
FAMLI premiums fund up to 12 weeks of partial wage replacement per year for qualifying leave, with up to four additional weeks available for serious health conditions tied to pregnancy or childbirth complications.6Justia Law. Colorado Code 8-13.3-505 – Duration Qualifying reasons include bonding with a new child, your own serious health condition, caring for a family member with a serious health condition, needs arising from a family member’s military deployment, and addressing issues related to domestic violence, sexual assault, or stalking.
You qualify for benefits once you have earned at least $2,500 in Colorado wages during the five most recently completed calendar quarters.4Family and Medical Leave Insurance. Individuals and Families FAQs Benefits are paid on a sliding scale, with a maximum weekly benefit of $1,381.45 under figures effective as of July 2025.7Family and Medical Leave Insurance. Rules and Guidance
Federal Tax Treatment of FAMLI Benefits
The premium itself is a payroll contribution, but if you receive FAMLI benefits, the federal tax treatment is not uniform. IRS Revenue Ruling 2025-4 breaks it down by leave type and funding source.8Internal Revenue Service. Revenue Ruling 2025-4
Family leave benefits, such as bonding leave or caring for a sick relative, are included in federal gross income. You will receive a Form 1099 reporting these payments if they total $600 or more in a year. Medical leave benefits are split: the portion funded by your own employee contributions is excluded from federal gross income under Internal Revenue Code Section 104(a)(3), while the portion funded by employer contributions is taxable and treated similarly to third-party sick pay.8Internal Revenue Service. Revenue Ruling 2025-4
All FAMLI benefit payments are exempt from Colorado state income tax.9Family and Medical Leave Insurance. IRS Tax Guidance for Employers Starting in 2027, employers will report taxable medical leave benefits on W-2 forms. The IRS ruling does not address benefits paid under private plans, so if your employer uses a private plan, confirm reporting with a tax professional.
Private Plans and Local Government Opt-Out
Employers are not locked into the state program. Any employer can apply for a private plan exemption through a state-approved insurance carrier or by self-insuring, provided the plan covers all employees and offers benefits, protections, and rights equal to or better than the state plan.10Family and Medical Leave Insurance. Private Plans The application carries a $500 fee, and premiums must continue flowing to the state until the private plan takes effect, no earlier than 60 days after the application is submitted. The employee payroll deduction under a private plan cannot exceed what the state plan would charge.
Local governments have a separate option: a city council, school board, or similar governing body can vote to decline FAMLI participation, which lifts the employer contribution and the employee withholding requirement for that entity.11Family and Medical Leave Insurance. FAQs for Local Governments Employees of an opted-out local government can still enroll on their own through the state. Local governments that decline must revisit the vote at least every eight years and notify employees of the decision within 30 days.