New payroll tax hits Mass. workers as paid family leave deductions take effect

BOSTON — Workers in Massachusetts will see a new deduction on their paychecks starting Tuesday to help fund the state's paid family and medical leave law.

The law is aimed at ensuring people aren't financially ruined because they want time to bond with a new child or to care for an ill family member. Workers will start paying into the fund on Oct. 1 with a 0.75% payroll tax -- up to a maximum of 38 cents for every $100 earned -- and some benefits will become available in January 2021.

So what does that mean for your paycheck? A worker making $60,000 a year would pay about a tax of about $4.38 each week, or close to $230 a year. Earnings up to $132,900 annually, per worker, are subject to the tax.

WATCH: What the new law means for workers

The $800 million program — outlined in the "grand bargain" law that Gov. Charlie Baker signed last summer to avert several ballot questions — will allow employees to take up to 12 weeks of paid leave to care for a new child, tend to an ill family member, or cope with a loved one's active military deployment. Workers can also take up to 20 weeks to recover from a serious illness or injury or to care for a service member who is ill or injured. (See the types of leave that are eligible.)

Benefits to care for a new child or sick service member or to manage a health issue become available on Jan. 1, 2021, while paid leave to care for ill family members will become available on July 1, 2021. Employees would be capped at receiving $850 per week in pay while on leave.

Specific deductions will vary by employers, but they can require workers to contribute up to 40 percent of their total medical leave contribution and up to 100 percent of their total family leave contribution.

Resources guide to PFML for workers, for employers

Estimate your benefits 


Earnings & eligibility requirements

Material from the State House News Service was used in this report