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December 8, 2021
2021-2211

Massachusetts paid family and medical leave contributions will decrease effective January 1, 2022

The Massachusetts Department of Family and Medical Leave has announced the contribution rates for Paid Family and Medical Leave (PFML) effective January 1, 2022. The PFML contribution rate is set each year and applies up to the Social Security wage limit, or $142,800 for 2021 and $147,000 for 2022.

PFML contribution rates for employers with 25 or more average employees

Employers with 25 or more covered individuals will be required to remit a contribution to the Department of Family and Medical Leave of 0.68% of eligible wages for 2021 and 0.68% for 2022. This contribution can be split between covered individuals' payroll or wage withholdings and an employer contribution as follows:

  • Up to 100% of the family leave contribution can be withheld from a covered individual's wages (0.13% of eligible wages for 2021 and 0.12% for 2022).
  • Up to 40% of the medical leave contribution can be withheld from a covered individual's wages (0.248% of eligible wages for 2021 and 0.224% for 2022).
  • Employers are responsible for contributing the remaining 60% of the medical leave contribution (0.372% of eligible wages for 2021 and 0.336% for 2022).

PFML contribution for employers with fewer than 25 covered employees

Employers with fewer than 25 covered individuals must remit an effective contribution rate of 0.378% eligible wages for 2021 and 0.344% for 2022. This contribution rate is less because small employers are not required to pay the employer share of the medical leave contribution, reducing the total contribution amount.

Small employers are responsible for remitting the funds withheld from covered individuals' earnings but are under no obligation to contribute themselves. However, they may elect to cover all or a portion of the employee's share as follows:

  • Up to 100% of the family leave contribution can be withheld from a covered individual's wages (0.13% of eligible wages for 2021 and 0.12% for 2022).
  • Up to 100% of the medical leave contribution can be withheld from a covered individual's wages (0.248% of eligible wages for 2021 and 0.224% for 2022). There is no employer share for employers with fewer than 25 covered employees.

Ernst & Young LLP insights

According to the Department, the employee portion of the PFML contribution must be paid with after-tax dollars (a pre-tax contribution is not allowed) (Massachusetts PFML website).

For more information, see the following resources.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kristie Lowery (kristie.lowery@ey.com)
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)

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