Maryland Payroll Compliance
Every rate, wage base, and county tax layer Maryland employers need for 2026 — sourced from the Comptroller and MD Labor — including the county-by-residence local tax system and FAMLI’s countdown to its 2027 launch.
Minimum Wage & Hours
Maryland’s statewide minimum wage is a uniform $15.00/hour for all employers — the state eliminated its old large/small employer split. Two counties, Montgomery and Howard, set their own higher local rates on top.
| Item | 2026 Value | Notes |
|---|---|---|
| Statewide minimum wage | $15.00/hr | Uniform for all employer sizes |
| Overtime rule | 40 hrs/week | Federal FLSA; no state daily overtime rule |
| Statute | Maryland Wage and Hour Law | Administered by the Dept. of Labor |
County Minimum Wage & Local Income Tax
Montgomery and Howard counties both run their own minimum wage schedules on top of the state floor, with rates jumping mid-year on July 1. Separately, every Maryland county plus Baltimore City levies its own local income tax, based on the employee’s county of residence — not work location, which is the opposite of how most states handle local tax.
| Jurisdiction | 2026 Rate | Notes |
|---|---|---|
| Montgomery County (through Jun 30) | $15.50/hr | Small employer tier; rises July 1 |
| Montgomery County (from Jul 1) | $15.96/hr | CPI-indexed annual adjustment |
| Howard County (through Jun 30) | $15.50/hr | Employers with under 15 workers |
| Howard County (from Jul 1) | $16.00/hr | Annual scheduled increase |
| Prince George’s County | $15.30/hr | Flat rate, no mid-year change |
| Local income tax | 2.25% – 3.20% | All 23 counties + Baltimore City; based on county of residence |
State Income Tax Withholding
Maryland's graduated state rate now runs from 2% to 6.5% after two new high-income brackets (6.25% and 6.5%) were added in 2025. Every paycheck also carries a local county tax, combined with the state rate under a single "STATE TAX" line on Maryland pay stubs.
| Item | 2026 Value | Notes |
|---|---|---|
| State bracket range | 2% – 6.5% | Two new top brackets (6.25%, 6.5%) added in 2025 |
| Local piggyback tax | 2.25% – 3.20% | Combined with state tax as a single withholding line |
| Required certificate | Form MW507 | Allowance-based; also determines the local tax county |
| Employer return | Form MW506 | Periodic withholding remittance |
| Annual reconciliation | Form MW508 | Due January 31, filed with W-2/1099 copies |
| Deposit frequency | 5 tiers | Accelerated (3-day), monthly, quarterly, or seasonal based on withholding volume |
Family & Medical Leave Insurance (FAMLI)
Maryland FAMLI has been delayed twice. As of April 2026, the Dept. of Labor reaffirmed the contribution rate for 2027 — contributions now begin January 1, 2027, with benefits following in 2028.
| Item | Value | Notes |
|---|---|---|
| Contribution start | January 1, 2027 | Delayed from earlier 2024/2025 target dates |
| Benefits available | 2028 | One-year gap between contributions and benefit availability |
| Total contribution rate | 0.9% | Reaffirmed April 2026 for wages paid Jan–Dec 2027 |
| Employer share | 0.45% | Waived for employers with fewer than 15 employees |
| Employee share | 0.45% | Withheld regardless of employer size |
| Wage cap | Social Security wage base | Next year's SS cap at time contributions begin |
| Max weekly benefit (planned) | $1,000 | Up to 90% wage replacement for lower earners |
| First filing due | April 30, 2027 | Covers Q1 2027 wages, remitted via paidleave.maryland.gov |
Unemployment Insurance (SUI)
Maryland's SUI wage base is one of the lowest in the country at $8,500. New employers pay a flat 2.6% before the Division of Unemployment Insurance assigns an experience-based rate after the first year.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $8,500 | Among the lowest wage bases nationally |
| New employer rate | 2.6% | Standard rate for the first year |
| Experienced employer range | Varies | Assigned after year one — confirm current range via MD Labor |
| Administering agency | MD Dept. of Labor | Division of Unemployment Insurance |
Official Maryland .gov Resources
Verify every figure and register for accounts at the source. These are the agencies Maryland employers work with for payroll.