Maryland payroll taxes for employers (2026)

What makes Maryland payroll harder than it looks

Every one of Maryland's 23 counties and Baltimore City levies a local income tax that employers withhold. For 2026 the rates run from 2.25% in Worcester County to 3.30% in Dorchester and Kent counties. That 3.30% is also the default when an employee has no valid Maryland address on file, so a missing address costs the worker money. Anne Arundel and Frederick counties use tiered rates, and the memo lists a 7.0% nonresident rate. Our Maryland county tax rate page goes through each one.

• New top state brackets: 6.25% and 6.5% apply from 2026 to single filers above $500,000 and $1,000,000.
• Out-of-state contractors: a foreign construction contractor pays the Maryland construction industry average, never below the new employer rate. The state did not publish the figure.
• Table A again: 2026 uses the same rate table as 2025, with a range of 0.30% to 7.50% and no surcharge listed.
• Minimum wage $15.00, with a $3.63 tipped cash wage.
• Final pay: due on or before the day wages would have been paid had the job continued (Lab. and Empl. 3-505). A written policy can limit payout of accrued leave.
• No state PEO license, according to Harbor Compliance (secondary).

Maryland employer payroll facts at a glance

Maryland employer cost for one $50,000 worker

Maryland's $8,500 base keeps the state unemployment line low. This is the 2026 math for a new employer at the 2.60% top of the new employer range.

A new employer assigned the 1.0% bottom of the range would pay 1.0% x $8,500 = $85.00 instead. See the full 2026 SUTA list for other states.

Planning for FAMLI contributions in 2027

Family and Medical Leave Insurance contributions begin January 1, 2027 at 0.9% of wages up to the Social Security wage base, which is $192,300 for 2027. The split is 0.45% employer and 0.45% employee, and you may withhold up to half. Employers with fewer than 15 total employees remit only 50% of the rate. The first remittance is due April 30, 2027, benefits begin by January 3, 2028, and the law caps the rate at 1.2%. There is no FAMLI cost in 2026.

Opening Maryland payroll accounts

1. Get a federal EIN.
2. Register for unemployment insurance in the Maryland Department of Labor's BEACON employer portal (employer.beacon.labor.md.gov). The department's new employer guide walks through it.
3. Register for withholding with the Comptroller of Maryland, and collect each employee's county of residence so the local rate is right.
4. Report new hires within 20 days of hire (electronic filers may send two monthly transmissions 12 to 16 days apart).
5. Arrange workers comp. Lab. and Empl. 9-402 requires each employer to cover all covered employees.
6. Before January 2027, set up FAMLI contributions in your payroll system.

If you searched for State of Maryland payroll because you are a state employee, this page covers private employers; your pay questions go to your agency's payroll or human resources office. If your Maryland company has a remote employee in another state, such as New Jersey, that state's withholding and unemployment rules usually apply to that worker.

Maryland payroll services and PEOs

The two tests for any provider here: does it assign the county from the employee's address and flag the 3.30% default, and is FAMLI on its 2027 roadmap? Compare prices on our payroll software rankings, and if you want benefits bundled, see PEOs ranked by score and typical PEO fees per employee. Hiring across the Potomac too? See Virginia payroll taxes.