Massachusetts payroll taxes and calculator for employers (2026)

Four Massachusetts rules that change your payroll math

1. PFML splits by company size

The 2026 PFML rate is 0.88% of wages up to the Social Security wage base ($184,500): 0.18% for family leave and 0.70% for medical leave. If you have 25 or more covered workers, you may deduct up to 0.46% from employees and must pay at least 0.42% yourself. Under 25, you remit only the 0.46% employee share and owe no employer share. In 2027, under Chapter 101 of the Acts of 2026, the employer's 0.42% moves to the family leave side and employees pay 0.28% family plus 0.18% medical. The total stays 0.88%.

2. Two surcharges ride on the UI wage base

The Employer Medical Assistance Contribution (EMAC) applies to the same first $15,000: nothing in your first three years, then 0.12% in year 4, 0.24% in year 5 and 0.34% from year 6. 2026 rates also carry a COVID-19 Recovery Assessment, with a schedule range of 0.178% to 2.716%. The new employer amount was not shown on the DUA pages we read, so ask DUA or check your rate notice.

3. Final pay is due the day you fire someone

A discharged employee must be paid in full on the day of discharge (M.G.L. c.149 s.148). A worker who quits is paid by the next regular payday. Hourly staff must be paid weekly or biweekly.

4. Contractors go on the new hire report

Report new employees within 14 days of their start, and report independent contractors within 14 days as well. Put contractor reporting on your onboarding checklist.

Massachusetts employer payroll facts at a glance

How to register as an employer in Massachusetts

1. Get your federal EIN from the IRS.
2. Register for withholding with the Massachusetts Department of Revenue. Use Circular M (effective January 1, 2026) for the 5.0% rate, the $4,400 exemption and the 4% surtax on wages over $1,107,750.
3. Register with DUA for an unemployment insurance account (mass.gov "Register a business with the Department of Unemployment Assistance").
4. Set up PFML deductions from your first paycheck. The mass.gov PFML rate page has an employer calculator.
5. Report each hire, rehire and independent contractor within 14 days.
6. Insure for workers comp. Every Massachusetts employer needs it, whatever its size or hours worked.

Our payroll setup guide covers the federal steps in more detail.

Massachusetts cost example: one $50,000 employee

Here is a new company with fewer than 25 employees. Because the UI base is only $15,000, the federal lines make up almost all of the cost.

That is $4,230 a year, 8.46% above salary. If you have 25 or more workers, add the 0.42% PFML employer share ($210 on $50,000) for $4,440. The worker also pays: $230 PFML (0.46%) and 5.0% state income tax after exemptions. From year 4, EMAC adds $18 (0.12% of $15,000), and $51 a year from year 6. Run your own numbers below. Calculator results show the federal and SUTA lines only, so add PFML by hand.

Payroll companies and PEOs in Massachusetts

Check three things before you pick a payroll company here: it remits PFML at the right split for your headcount, it handles EMAC once you reach year four, and it reports contractors to the new hire program. Gusto, for example, lists $49 a month plus $6 per person for single-state payroll (pricing page checked October 16, 2026). Compare that with others in our payroll software rankings and what payroll services cost.

PEOs must register with the Massachusetts Department of Labor Standards under 454 CMR 30.00. Ask any PEO for its registration before you sign. The PEO rankings and PEO pricing breakdown show what the admin fee usually covers.