Contributions

FAMLI will be funded through contributions from both employers and employees. Starting January 2027, you will collect employee contributions through payroll deductions, add your employer contribution, and remit the total quarterly. Contribution amounts vary based on employer size—small employers with fewer than 15 employees pay less. This page explains rates, cost-sharing, and the remittance process.

Calculating contributions

FAMLI will be funded through contributions from both employers and employees. Each year, MD Labor will set the contribution rate based on actuarial estimates, ensuring the program remains financially sustainable.

How FAMLI contribution rates will be set

In September 2023, MD Labor announced a contribution rate of 0.9%, split equally between employers and employees (0.45% each).

Following legislation passed in 2025 (HB102), MD Labor is required to announce an updated contribution rate by May 1, 2026 for the period of January 1, 2027 through December 31, 2027. MD Labor will use an actuarial analysis to determine if any changes are needed.

Annual rate announcements

Starting in 2027, MD Labor will announce the contribution rate for the following calendar year every November. The total contribution rate cannot exceed 1.2% of wages, up to the Social Security wage cap, for each employee.

How contribution amounts are split

You will be able to withhold up to 50% of the contribution rate from employees’ paychecks.

Small employers: (those with fewer than 15 total employees, counting both Maryland and out-of-state employees) are only responsible for remitting 50% of the contribution rate and may withhold that amount from employee pay.

Paying the full contribution: Employers can choose to pay the full contribution amount on behalf of their employees, but there may be tax implications. Employers should consult with a tax professional before making this decision.

If you participate in the State Plan, you will not be individually charged more based on your employees’ use of benefits. Private plans may be structured differently.

How we will determine employer size

The FAMLI Division will determine employer size based on the total number of employees, including those working inside and outside of Maryland. Even employers with just one employee in Maryland must comply with FAMLI requirements.

During 2027: The Division will calculate employer size each quarter based on quarterly wage and hour reports. If your quarterly total of employees is below 15, you will qualify for the lower rate that quarter.

Starting in 2028: The Division will average the total number of employees across the previous 4 quarters to determine employer size. If your 4-quarter average is below 15, you will qualify for the lower rate for the entire following year.

When contributions are not owed

There may be times when an employee is not receiving wages, such as when receiving Workers’ Compensation or taking unpaid time off. Neither you or the employee owes contributions during these periods.

Collecting employee contributions

Employers will collect contributions through payroll deductions for all employees working in positions localized in Maryland. All employees localized in Maryland must participate—there are no exceptions, and employees cannot opt out, even if they may not qualify for benefits.

FAMLI is an insurance program. Contributions from employers and employees will be used to pay benefits for approved claims. Employees will not be reimbursed for contributions made to the program, even if they do not apply for benefits.

Timing of deductions

You will need to collect contributions during the regular pay cycle. Contributions cannot be deducted after the pay period ends.

Exception: If an employee’s paycheck is too small to cover their full contribution amount, you will have up to six pay periods to collect the total owed. This scenario is likely to apply mainly to tipped workers.

Payroll system support

The FAMLI Division anticipates that payroll vendors will update their systems to make the contribution collection process seamless for employers.

How to remit contributions

You will remit contributions, along with wage and hour reports, electronically every quarter through paidleave.maryland.gov, starting in April 2027.

Contributions will be due on the last day of the month following each quarter. This means you will remit payment for the previous three months of wages.

Quarterly contribution and reporting schedule:

• January 1 – March 31 wages → contributions due April 30
• April 1 – June 30 wages → contributions due July 31
• July 1 – September 30 wages → contributions due October 31
• October 1 – December 31 wages → contributions due January 31

The first contribution payment, covering wages paid January 1 – March 31, 2027, will be due April 30, 2027.

Third-Party Agents (TPAs)

The FAMLI Division understands that you may work with Third-Party Agents (TPAs) to manage payroll and benefits. We are developing our resources and systems with this in mind.