Add this tax category - New Leave Tax for Minnesota 2026

Minnesota is implementing a Paid Leave tax for employees and employers starting in January 2026. We will be responsible for withholding of .44% for the employees' portion of the paid leave.

Who pays for Paid Leave? Paid Leave is funded by premiums paid by employees and employers. The initial premium rate for small employers is 0.66% of wages up to the cap set by Social Security’s Old-Age, Survivors, and Disability Insurance program (currently $185,000). Your employer may deduct up to 0.44% of your wages to fund your portion of the premium. This is the same amount as employees working for large employers. These total premium covers both Medical Leave (0.46%) and Family Leave (0.2%).

Do you know if there are plans to add this as a withholding?