Starting Jan. 1, 2026, payroll deductions began funding PFML, with employers submitting quarterly payments to the state. The first payment is due April 30, 2026.
Key Details:
• Total premium rate: 0.88% of employee wages, up to the Social Security wage cap ($176,100 in 2025).
• Employer share: At least 50% of the total premium (0.44% of wages).
• Employee share: Up to 50% of total premium (0.44% of wages).
• Flexibility: Employers can pay more than their 50% share, but cannot require employees to pay more than 50% of the premium.
• The IRS has issued initial guidance on how PFML contributions and payments will be handled:
• Premiums: Collected on post-tax wages. Employer required contributions can be deducted as an excise tax. If employers cover more than their required share, they can deduct this additional contribution as an ordinary and necessary business expense.
• W2: Employers should put the amount of the employee’s contribution and the amount of any employer pickup contribution in Box 14 of the W2 labeled as MNPFML.
• Family Leave Benefits: These benefits are not counted as wages. The Paid Leave department will issue employees who take Family Leave a 1099 at the end of the year.
• Medical Leave Benefits: These benefits are considered as wages (third-party sick pay); and are subject to Social Security and Medicare taxes. This amount will be 50% for most employers, and 33% for small employers and should be reported as wages on a W2. The state will provide employers with the taxable amount of Medical Leave payments.
