MA PFML for Employers: Rates, MassTaxConnect Filing, and Exemptions

If you employ anyone whose primary work location is in Massachusetts, you are subject to the state’s Paid Family and Medical Leave program, and compliance for Massachusetts PFML employers in 2026 comes down to five things: register under your EIN, withhold and remit contributions at the correct rate, give employees the required notices, report contributions on W-2s, and protect workers who take leave from retaliation or a demoted return. The Department of Family and Medical Leave (DFML) administers the program and enforces every piece of it.¹

Who Has PFML Obligations

One Massachusetts-based employee is enough to trigger coverage. The statute identifies each employer by its Federal Employer Identification Number, so separate EINs under common ownership are treated as separate employers.²

The number that decides how much you pay is 25. Employ 25 or more covered individuals in Massachusetts and you owe the employer share of medical leave contributions out of pocket. Fewer than 25 and you only withhold the employee portions and forward them to the state.³ Status is reassessed annually, so a few new hires can push you across the line.

Covered individuals include all W-2 employees. They also include 1099-MISC contractors if your business reports payments on Form 1099-MISC for more than 50% of its workforce, in which case you’re a “covered business entity” and those contractors count toward the 25 as well.²

An out-of-state headquarters does not exempt you. If a remote worker’s primary location is Massachusetts, that worker is covered no matter where your corporate office is.

2026 Contribution Rates and How to Split Them

Large employers (25 or more covered individuals) owe a total contribution of 0.88% of each covered individual’s eligible wages for 2026. Those two components split differently between employer and employee:⁴

Family leave (0.18%): you may withhold the entire amount from employee wages. No employer share required.
Medical leave (0.70%): you may withhold up to 40% from the employee (0.28% of wages). You must pay the remaining 60% (0.42% of wages) yourself.

Small employers (fewer than 25 covered individuals) owe an effective 0.46%. The whole amount can be withheld from employees — 0.18% for family leave and 0.28% for medical leave — because no employer share is required. Small employers may cover part or all of the employee share voluntarily, but nothing requires it.⁴

Contributions apply only to wages up to the Social Security taxable wage base, $184,500 for 2026.⁵ Once an employee’s year-to-date earnings exceed that amount, stop withholding and contributing.

Filing and Paying Through MassTaxConnect

Registration, quarterly wage reports, contributions, and exemption applications all run through the Department of Revenue’s MassTaxConnect portal.⁶ Each EIN needs its own account and files separately. Quarterly, you’ll list total wages paid to each covered individual, confirm the contribution amounts, and remit electronically.

Late filing is expensive. An employer that fails to submit contributions can face a penalty based on total annual payroll multiplied by the current contribution rate, plus the full amount of any benefits DFML paid to employees during the period of noncompliance. That formula produces a very large number quickly, even for a mid-sized workforce.

Required Notices to Workers

Two notification duties apply to every Massachusetts employer.

First, post a DFML-approved poster where employees can easily read it, such as a break room or common area. It explains program benefits.⁷

Second, give each new employee a written notification form within 30 days of hire. If more than 50% of your workforce consists of 1099-MISC contractors, notify those contractors as well.⁷ The notice should explain current contribution rates, how the program works, and how to file a claim. DFML publishes template forms and updated rate sheets. Keep completed forms in your own files; don’t send them to DFML.

The fines for skipping notices are $50 per employee for the first violation and $300 per employee for each subsequent violation.⁷

W-2 Reporting and Federal Tax Treatment

At year end, report each employee’s PFML contributions in Box 14 of the W-2 using the label “MAPFML.” Include only the employee’s share — family plus medical combined — not any employer contributions. For 1099-MISC contractors covered under the program, use Box 16.⁸

Employees who actually receive benefits get a Form 1099-G directly from DFML in January. You don’t generate that form.⁹

IRS Revenue Ruling 2025-4 clarified federal tax treatment starting with tax year 2025. Family leave benefits count as gross income but not wages, so DFML reports them on the 1099-G and no federal employment taxes apply. Medical leave benefits split: the portion attributable to the employer’s contribution is sick pay subject to federal income tax and employment taxes, while the portion attributable to the employee’s contribution is excluded from gross income entirely. For a large employer paying 60% of medical leave contributions, roughly 60% of an employee’s medical leave benefit is federally taxable as wages and 40% is excluded. If you run a private plan, work with your carrier or tax advisor to allocate benefits correctly between those categories.

Private Plan Exemptions

You aren’t required to use the state plan. If your private insurance or self-insured plan offers benefits equal to or better than the state program, you can apply for exemption. Exemptions are available separately for family leave and medical leave, so a mixed setup is allowed.

An insured private plan exemption requires your carrier’s information, policy number, and effective dates, submitted through MassTaxConnect. The plan must match or exceed state benefit levels, leave durations, and job protections. DFML reviews and approves or denies.

A self-insured plan requires a surety bond running to the Commonwealth, sized to your Massachusetts workforce and expected benefit costs, plus a Self-Insurance Declaration Document.¹⁰ Each EIN under the policy needs its own exemption application.¹¹

Exemptions do not last forever. Renew by submitting a new application through MassTaxConnect during the quarter before your current exemption expires — if it expires September 30, you can start July 1.¹² Submit after the policy renewal date and you’ll either need a formal backdate or become liable for state PFML contributions during the gap. You cannot collect retroactive contributions from employees to cover a lapsed period.¹¹

Restoring Employees After Leave

When an employee returns from approved PFML leave, restore them to the same job or an equivalent role with the same pay, status, benefits, seniority, and length-of-service credit. Previously earned vacation, sick time, bonuses, and other benefits cannot be reduced or paused because of the leave.¹³

Two narrow exceptions: no restoration is required if coworkers with similar seniority were laid off during the leave due to genuine economic conditions, or if the job was for a specific project that ended and the employee wouldn’t have continued working regardless of leave.¹³

One important nuance: time spent on PFML leave does not have to count toward benefit accrual, vesting, or eligibility. The clock pauses for those purposes, but everything earned before leave stays intact.¹³

If an employee is also covered under federal FMLA, the two leaves generally run concurrently rather than stacking. Track against both entitlements at the same time.

Retaliation Rules and the Six-Month Presumption

This is where employers most often get into trouble. You cannot fire, discipline, demote, suspend, or threaten an employee because they took or applied for PFML leave. The same protections cover employees who file complaints or participate in related proceedings.¹³

The statute creates a legal presumption that works against employers. Any negative change in pay, status, seniority, or other terms of employment that occurs during leave or within six months afterward is presumed to be unlawful retaliation. Rebutting that presumption requires clear and convincing evidence — a high bar — that you would have taken the same action regardless of the leave.¹⁴

An employee who believes they were retaliated against can sue in Massachusetts Superior Court within three years. All common-law tort remedies are available to a prevailing plaintiff, and the court can order injunctive relief and reinstatement on top of damages.¹⁴ Protection kicks in when the employee tells you they plan to take leave, not when leave actually starts, and applies even if the employee is covered under your private plan rather than the state program.¹³

Practical takeaway: document performance issues in real time. If a discipline or termination decision touches someone who recently announced or took PFML leave, the paper trail supporting that decision should predate the leave announcement and stand on independent grounds.

Appealing a DFML Decision

If DFML approves benefits for an employee you believe doesn’t qualify, or issues another determination you dispute, you have 10 calendar days from receiving notice to file an appeal. Submit online at paidleave.mass.gov, by phone at (833) 344-7365, or by mail or fax using DFML’s Appeal Request Information Form. Miss the window and you can still request an appeal, but you’ll need to show good cause and that the delay was beyond your control.¹⁵

If a denial came from your private insurance carrier rather than the state, the employee must appeal through the carrier first and can escalate to DFML only after that appeal is denied.¹⁵

A Note on Self-Employed Individuals

Self-employed people aren’t automatically covered but can voluntarily opt in through MassTaxConnect, committing to at least three years and paying the full 0.88% rate on their own earnings.¹⁶ For employers, the point is that a self-employed contractor’s opt-in has no bearing on your obligations; whether you must contribute for a 1099-MISC worker still depends on the more-than-50% workforce test.

1
Mass.gov. Department of Family and Medical Leave
2
General Court of Massachusetts. Massachusetts Code Chapter 175M Section 1
3
Mass.gov. Massachusetts Code c.175M Section 6 – Contributions
4
Mass.gov. Paid Family and Medical Leave Employer Contribution Rates and Calculator
5
Social Security Administration. Contribution and Benefit Base
6
Mass.gov. PFML Exemption Requests, Registration, Contributions, and Payments
7
Mass.gov. Informing Your Workforce About Paid Family and Medical Leave
8
Mass.gov. Wage Contributions and Reporting for Paid Family and Medical Leave
9
Mass.gov. Taxes on Paid Family and Medical Leave (PFML) Benefits
10
Mass.gov. Requirements for Self-Insured Private Paid Leave Plans
11
Commonwealth of Massachusetts. Massachusetts Paid Family and Medical Leave Self-Insurance Declaration Document
12
Mass.gov. Renewing Your Private Plan Exemption
13
Mass.gov. Notices, Appeals, and Employee Protections Under Paid Family and Medical Leave (PFML)
14
General Court of Massachusetts. Massachusetts Code Chapter 175M Section 9
15
Mass.gov. Appealing a Paid Family or Medical Leave Decision
16
Mass.gov. Paid Family and Medical Leave Coverage for Self-Employed Individuals