Massachusetts

Discussion

Massachusetts: PFML Contribution Rate Changes for 2027

Effective January 1, 2027, Massachusetts employers with 25 or more workers covered by Massachusetts Paid Family and Medical Leave (PFML) may deduct and remit up to 100% of the medical leave contribution and up to 40% of the family leave contribution from wages, reversing the current structure in effect through December 31, 2026 (under which employers may deduct up to 100% of the family leave contribution and up to 40% of the medical leave contribution, with the employer covering the remaining medical leave share). Smaller employers, with 24 or fewer covered workers, are not required to contribute an employer share toward medical leave but remain responsible for withholding and remitting the applicable employee shares for both medical and family leave. The change stems from a 2025 IRS ruling that employer contributions to medical leave will be treated as taxable income, prompting Massachusetts to shift more of the medical leave contribution onto employees. Washington made a similar change earlier this year, and other states may follow. The actual 2027 total contribution rate will not be finalized until October 1, and the Massachusetts Department of Family and Medical Leave offers an online calculator to help employers estimate their required contributions. Massachusetts employers should prepare to update payroll processes and employee communications ahead of the new year.

 

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