Massachusetts Payroll Compliance 2026

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Minimum Wage & Hours

Massachusetts’s minimum wage has held at $15.00/hour since January 1, 2023 — the final step of the 2018 “Grand Bargain” law that also phased out Sunday and holiday premium pay entirely. No further increase is scheduled; any future raise requires new legislation or a ballot question.

Item	2026 Value	Notes
Minimum wage	$15.00/hr	Unchanged since Jan 1, 2023; uniform statewide
Tipped service rate	$6.75/hr	Tip credit up to $8.25; employee must earn >$20/month in tips
Agricultural workers	$8.00/hr	Separate statutory rate under M.G.L. c.151 §2A
Youth sub-minimum	None	Massachusetts pays the same $15.00 rate regardless of age
Overtime rule	1.5× after 40 hrs/wk	Restaurant workers exempt from state OT, but not federal FLSA
Sunday/holiday premium pay	Eliminated	Fully phased out Jan 1, 2023 as part of the Grand Bargain
Statutory floor	Fed + $0.50	State rate can never fall below $0.50 above the federal minimum

Minimum wage — the “Grand Bargain” ramp

$12.75 → $15.00, now flat for four years

The 2018 law raised the rate every January through 2023, then stopped — no automatic increases are built into Massachusetts law.

$12.75

$13.50

$14.25

$15.00

20202021202220232026

Grand Bargain ramp years Current, held flat since 2023. Per M.G.L. c.151 as amended by Chapter 121 of the Acts of 2018.

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Regional Wage Comparison

Unlike California, New York, Illinois, or Washington, Massachusetts has no local minimum wage ordinances anywhere — not in Boston, Cambridge, Worcester, or any other municipality. The $15.00 rate is uniform across all 351 cities and towns, which meaningfully simplifies multi-location payroll within the state.

2026 minimum wage — New England

How Massachusetts compares regionally

Connecticut and Vermont both run higher CPI-indexed rates; New Hampshire has no state minimum above the federal floor.

Connecticut

$16.94

Rhode Island

$15.00

Massachusetts

$15.00

Vermont

$14.01

New Hampshire

$7.25

Bars scaled to Connecticut’s $16.94. New Hampshire has no state minimum wage law and defaults entirely to the federal floor.

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State Income Tax Withholding

Massachusetts applies a flat 5.0% rate to most wage income, but the 2022 “Fair Share Amendment” (Millionaire Surtax) adds a further 4% on taxable income above an inflation-adjusted threshold — $1,107,750 for 2026. Unlike most states, Massachusetts has no standard deduction; it uses personal exemptions instead.

Item	2026 Value	Notes
Base withholding rate	5.0% flat	Applies to wages, salaries, and most other income types
Fair Share surtax	+4% over $1,107,750	Combined effective top rate 9%; threshold rises annually for inflation
Standard deduction	None	Massachusetts uses personal exemptions instead
Required certificate	Form M-4	Massachusetts-specific; federal W-4 is not a substitute
FICA deduction allowance	Up to $2,000/yr	Employee's FICA paid may reduce MA taxable wages
Student exemption	< $8,000/yr	Full-time students below this income are exempt from withholding
Withholding guide	Circular M	Published annually with percentage-method and wage-bracket tables
Local income tax	None	No Massachusetts city or town imposes one
Reciprocity	None	Massachusetts has no reciprocal withholding agreements

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Paid Family & Medical Leave (PFML)

Massachusetts PFML, fully operational since January 2021, splits its rate structure by employer size — a two-tier system worth configuring correctly. Employers with 25 or more covered individuals owe the full 0.88% premium (employer covers the difference above the employee’s 0.46% share); employers with fewer than 25 owe nothing beyond withholding the employee’s share.

Item	2026 Value	Notes
Total premium (25+ employees)	0.88%	Employer pays the difference above the employee share
Total premium (<25 employees)	0.46%	Employee share only — employer owes nothing extra
Employee share (all employers)	0.46%	0.28% medical leave + 0.18% family leave
Employer share (25+ only)	0.42%	Toward the medical leave portion specifically
Wage cap	$184,500	Aligned to the 2026 Social Security (OASDI) wage base
Max weekly benefit	$1,230.39	Up from $1,170.64 in 2025
Medical leave duration	Up to 26 weeks	Employee’s own serious health condition
Family leave duration	Up to 12 weeks	Bonding, caregiving, or military exigency
Coverage	1+ MA employee	Applies to out-of-state employers with any employee working in MA

2026 PFML premium by employer size

The 25-employee line changes everything

Crossing 25 covered individuals nearly doubles the total premium rate — the added cost is entirely employer-side.

25+ employees (total)

0.88%

<25 employees (total)

0.46%

Employee share (either size)

0.46%

Bars scaled to the 0.88% large-employer total. The employee share stays fixed at 0.46% regardless of employer size — only the employer's obligation changes.

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Unemployment Insurance (SUI)

Massachusetts unemployment insurance is administered by the Department of Unemployment Assistance (DUA). New employers pay 2.42% on the state’s $15,000 taxable wage base — about $363 per employee per year — before shifting to an experience-rated schedule after several years of payroll history.

Item	2026 Value	Notes
SUI taxable wage base	$15,000	Per employee, per year
New employer rate	2.42%	≈$363/employee/year; confirm current figure via DUA
Experienced employer range	~0.9% – 14.37%	Among the widest experience-rating spreads in the country
Administering agency	DUA	Separate from the Dept. of Revenue, which handles withholding