What Is the CO PFL Tax and How Does It Work?
Navigate Colorado's Paid Family and Medical Leave tax. This guide clarifies the mechanics of the CO PFL contribution for businesses and individuals.
The Colorado Paid Family and Medical Leave (CO PFL) tax is a state-mandated contribution that funds the comprehensive Paid Family and Medical Leave Insurance (FAMLI) program. This tax ensures eligible individuals can access partial wage replacement when they need to step away from work for significant life events. Understanding this contribution is important for both employers and employees across Colorado, as it directly impacts payroll and benefits.
Understanding Colorado’s Paid Family and Medical Leave
The FAMLI program provides paid leave benefits, allowing eligible workers to take time off for qualifying family and medical reasons without losing their entire income. These reasons include:
Bonding with a new child.
Caring for a family member with a serious health condition.
Addressing one’s own serious health condition.
Managing needs related to a family member’s military deployment.
Seeking safety from domestic violence or sexual assault.
Contributions to the FAMLI program began on January 1, 2023, with benefits available starting January 1, 2024. To qualify, an employee must have earned at least $2,500 in wages subject to FAMLI premiums within Colorado over the last year. Eligible employees can receive up to 12 weeks of paid leave per year, with an additional four weeks available for complications related to pregnancy or childbirth.
The FAMLI program provides a percentage of an employee’s average weekly wage, with lower-wage earners receiving a higher percentage. The maximum weekly benefit is capped at $1,100 for 2024, which may adjust in subsequent years based on the state average weekly wage. The program also offers job protection for employees who have worked for their employer for at least 180 days before taking leave, ensuring they can return to their position or an equivalent one.
Who Pays and How Much
The responsibility for contributing to the Colorado FAMLI program is shared among employers, employees, and self-employed individuals who choose to participate. For 2023 and 2024, the total contribution rate is 0.9% of an employee’s wages, split evenly between the employer and employee, each contributing 0.45%.
Employers with fewer than 10 employees nationwide are not required to pay the employer’s share of the premium. However, they are still responsible for collecting and remitting the employee’s 0.45% share. Businesses with 10 or more employees must pay the 0.45% employer share, in addition to collecting the employee portion.
Contributions are calculated on an employee’s wages up to the Social Security wage base, which is $168,600 for 2024. Wages earned above this annual limit are not subject to FAMLI contributions. For example, an employee earning $50,000 annually would contribute $225 (0.45% of $50,000), and their employer (if they have 10+ employees) would contribute an equal amount. The premium applies to most forms of compensation, including salaries, hourly wages, and tips.
Self-employed individuals living and working in Colorado have the option to voluntarily opt into the FAMLI program. If they participate, they pay the full 0.45% of their gross income from self-employment. Participation requires a commitment to pay premiums for a minimum of three years.
Reporting and Remitting Contributions
Employers and self-employed individuals enrolled in the FAMLI program fulfill their contribution obligations through the My FAMLI+ Employer online portal. This platform facilitates the submission of quarterly wage reports and premium payments to the FAMLI Division. Employers must register their business with this portal to manage accounts and ensure compliance.
Wage reporting and premium remittances are due quarterly, aligning with the unemployment insurance schedule. Deadlines for submissions are:
April 30 for the first quarter.
July 31 for the second quarter.
October 31 for the third quarter.
January 31 of the following year for the fourth quarter.
Electronic submissions are recommended for efficiency.
For reporting, employers must provide accurate data, including detailed records of employee wages and headcount. The portal allows for manual wage entry for a small number of employees or the submission of wage report documents in XML or CSV formats for larger payrolls.
Payment methods accepted include direct online payments through the My FAMLI+ Employer portal, ACH credit, or check. Employers must submit both their portion (if applicable) and the employees’ withheld contributions to the FAMLI Division. Employers should coordinate with their payroll providers to ensure timely and accurate collection and remittance of these funds.