Colorado payroll taxes and calculator for employers (2026)

Colorado payroll laws that change the numbers

FAMLI premiums

FAMLI costs 0.88% of wages in 2026 up to $184,500 (the Social Security wage base). You may deduct up to half, 0.44%, from the employee and pay the other 0.44% yourself, or cover all of it. FAMLI's employer page says employers with 9 or fewer employees owe only the employee's 0.44%. The maximum weekly benefit is $1,448.02. The 2027 rate has not been announced.

Your UI rate is three rates

The 3.05% new employer rate is 1.53% base plus a 0.17% support surcharge plus a 1.35% solvency surcharge. The solvency surcharge is on for 2026 because the fund's 2025 reserve ratio was 0.649%. CDLE's introductory rates page says it will not be in effect for 2027, so expect a lower combined rate next year if nothing else changes. Heavy construction starts at 6.285%; general construction and trades use the regular 3.05%. See construction payroll for the industry side.

Denver's occupational privilege tax

For any month an employee earns $500 or more for work in Denver, you withhold $5.75 from the worker and pay $4.00 yourself. Owners, partners and managers doing business in Denver owe the $4.00 too, whatever they earn. Details are on our Denver occupational privilege tax page. Other Colorado cities may levy a similar tax; we have not verified a full list.

Pay and final pay rules

• Pay periods can be no longer than a month (or 30 days), and payday is no later than 10 days after the period closes.
• A fired or laid-off worker is paid immediately. If the payroll office is closed, you have until 6 hours into its next workday, or 24 hours if payroll is handled off-site. We did not record an official source for this rule, so confirm it with CDLE.
• Minimum wage is $15.16 statewide, but Denver is $19.29, Edgewater $18.17 and the City of Boulder and unincorporated Boulder County $16.82.

Colorado employer payroll facts at a glance

How to register as a Colorado employer

The same steps apply whether your business is in Littleton, Grand Junction or Denver; Denver adds one local account.

1. Get a federal EIN from the IRS.
2. Register for wage withholding with the Colorado Department of Revenue. Use the 2026 DR 1098 worksheet (4.40%).
3. Open an unemployment insurance account with CDLE's Division of Unemployment Insurance. Its MyUI Employer+ page links only to an employer login, and we could not confirm a separate new-employer registration page, so contact the division if you cannot set up an account there.
4. Set up FAMLI premium reporting with the FAMLI Division.
5. Report new hires within 20 calendar days through Colorado Child Support Services' new hire reporting program. Contractors who give you a Social Security number should be reported too.
6. Buy workers comp. Colorado requires it from the first employee, including part-time staff.
7. If anyone works in Denver, set up occupational privilege tax with Denver's Department of Finance, Treasury.

One Colorado employee at $50,000: the full tax bill

This example is a new company with 10 or more employees, outside Denver.

That is $5,020.30, 10.04% on top of salary. Colorado UI is the biggest state line at $933.30 because of the two surcharges. A company with 9 or fewer employees skips the $220 FAMLI employer share. In Denver, add $48 a year in employer OPT ($4.00 x 12). The worker pays $220 FAMLI, 4.40% state withholding and, in Denver, $69 a year in OPT.

The calculator covers federal taxes and UI; add FAMLI and OPT yourself. For a fuller budget with benefits, see the cost of running payroll.

Payroll programs and PEOs for Colorado small businesses

Ask any payroll program whether it files FAMLI premiums and Denver OPT, not just state withholding and UI. Gusto's Simple plan is $49 a month plus $6 per person (pricing page checked October 16, 2026). Compare published prices in our payroll software rankings.

PEOs operating in Colorado file an annual employee leasing company report and certification (form UITL-39) with CDLE's unemployment division. We cover the options in Colorado PEOs compared and the national field in the best PEOs.