Maryland county income tax withholding

How the local rate is chosen

Lowest county

2.25%Worcester

Highest county

3.30%Dorchester, Kent

No valid address

3.30%default

Nonresident rate

7.0%per the 2026 memo

The local rate follows the employee's Maryland address. Two counties, Anne Arundel and Frederick, use tiered local rates that change with income, so their withholding is not a single flat percentage; take the tiers from the Comptroller's memo. The memo also lists a 7.0% nonresident rate for people who work in Maryland but live elsewhere.

A note on sourcing. The Comptroller's employer withholding help pages returned only a page title when we checked them on October 16, 2026, so the figures here come from the Comptroller's 2026 withholding memo PDF. Confirm the residence rule for unusual cases with the Comptroller.

The rates and rules

Worcester vs Kent on a $60,000 salary

Across counties, the same salary carries $630.00 more local tax at the top rate than at the bottom. State tax comes on top, with brackets from 2.00% to 6.50% in 2026; the new 6.25% and 6.5% brackets start above $500,000 and $1,000,000 for single filers, so they do not touch this employee. The local tax is not an employer cost. Your Maryland unemployment cost at the 2.60% new employer rate on $8,500 is $221.00 a year; the Maryland payroll tax page has the rest and the employee cost calculator totals it.

FAMLI arrives January 1, 2027

Maryland's paid family and medical leave program, FAMLI, starts collecting contributions on January 1, 2027, at 0.9% of wages up to the Social Security wage base ($192,300 in 2027). The rate splits 0.45% employer and 0.45% employee, and you may withhold up to half from the employee. Employers with fewer than 15 employees remit only 50% of the rate. The first remittance is due April 30, 2027, and benefits begin by January 3, 2028.

• 15 or more employees, $60,000 salary: $60,000 x 0.9% = $540.00 a year, of which up to $270.00 can come from the employee.
• Fewer than 15 employees: you remit half the rate, $60,000 x 0.45% = $270.00, which you may withhold from the employee.

Set this up in payroll this fall alongside the county codes.

Where Maryland local withholding goes wrong

• Missing addresses default high. An employee coded with no valid address is withheld at 3.30%, which over-withholds anyone in a lower-rate county.
• Treating Anne Arundel and Frederick as flat. Both have tiered rates.
• Mid-year moves between counties. Update the county code when the address changes, and keep the date.
• Out-of-state staff. Pennsylvania lists Maryland among its reciprocal states for Pennsylvania income tax. Check how the Comptroller handles residents of other states before choosing between the 7.0% nonresident rate and home-state withholding.
• Remote employees of out-of-state companies. A Maryland resident working from home for a Virginia or Delaware company still lives in a Maryland county. If you withhold Maryland tax for that person, your provider needs the full address to pick the local rate.

What payroll software must handle

For Maryland you need a county field per employee, the Anne Arundel and Frederick tiers, the nonresident rate and, from 2027, FAMLI. OnPay's pricing page says federal, state and local filings are included at $49 a month plus $6 per worker (checked October 16, 2026). Compare more providers in our payroll software rankings, and see payroll taxes explained, SUTA rates for 2026, Indiana's county income tax and Pennsylvania's local EIT for neighbors with their own local systems.