What Changes on January 1, 2027
Under Chapter 101 of the Acts of 2026, Massachusetts is shifting how Paid Family and Medical Leave (PFML) contributions are split between medical leave and family leave beginning January 1, 2027. According to the Department of Family and Medical Leave (DFML), the change reverses the 2026 allocation: employers previously bore 60% of the cost of medical leave, and they will instead bear 60% of the cost of family leave. Medical leave will be funded entirely by employee withholding for larger employers.
DFML states the change is intended to mitigate the impact of recent IRS guidance on the tax treatment of Massachusetts PFML benefits.
| Employer Size / Leave Type | Total Rate | Employee Share | Employer Share |
|---|---|---|---|
| 25 or more covered individuals — Family leave | 0.70% | Up to 0.28% | 0.42% 60% employer |
| 25 or more covered individuals — Medical leave | 0.18% | 100% (0.18%) | None Shift |
| 25 or more — Combined | 0.88% | — | — |
| Fewer than 25 covered individuals — Family leave | 0.46% | 100% | None |
| Fewer than 25 covered individuals — Medical leave | 0% | — | — |
Payroll Impact
The change affects how contributions are categorized and split, so payroll and tax filing systems that track medical and family leave separately will need to be reconfigured. Employers with 25 or more covered individuals should set the family leave rate at 0.70% (employee withholding up to 0.28%, employer share 0.42%) and the medical leave rate at 0.18% with no employer share. Smaller employers should set family leave at 0.46% funded entirely through employee withholding, with no medical leave employer contribution.