Maryland FAMLI Contributions Start in January: What to Take From Each Paycheck

On a $1,000 paycheck, Maryland’s new paid leave contribution comes to $4.50. From wages paid on January 1, 2027, Maryland FAMLI takes 0.9% of each employee’s pay, split evenly: 0.45% from the worker and 0.45% from the employer. A business with fewer than 15 employees pays no employer share at all. It still has to withhold the worker’s half, file a report every quarter and send the money in, starting April 30, 2027.

For most trade crews in Maryland, then, the cost to the business is close to nothing. The work is in setting up payroll correctly before the first January pay date and in counting your employees the way the state does.

What Maryland FAMLI is

FAMLI, the Family and Medical Leave Insurance program, is Maryland’s state-run paid leave insurance. Workers pay into it now, and from January 1, 2028 it will pay eligible employees up to 12 weeks of job-protected leave a year at up to $1,000 a week. The FAMLI Division of the Maryland Department of Labor runs it. It’s a legal requirement for every employer with at least one employee working in Maryland, not an optional benefit. The law is Title 8.3 of the Labor and Employment Article, created by the Time to Care Act of 2022, and the contribution rules are in section 8.3-601 and the program’s regulations, COMAR 09.42.

One owner-operator with nobody else on payroll isn’t an employer for FAMLI, even through an LLC or an S corporation. Hire one person in Maryland and you’re in.

Register with Maryland FAMLI before the first report

Registration opened on September 1, 2026, on the FAMLI employer portal. The state’s own wording is blunt: “If you have at least one employee in Maryland, you are required to register.” There’s no published registration deadline for existing employers. In practice you need the account before the first quarterly report opens on April 1, 2027, and the state asks employers to register as soon as possible.

An authorized officer of the business has to register it. Your payroll company or accountant can’t do it for you, but once you’re set up you can give them power of attorney to file the reports. Have your EIN, your six-digit NAICS code and your physical business address ready. Choose the registration type carefully, because the state says you can’t change it later.

What comes out of each paycheck

The state has set the 2027 rate at 0.9% of wages, up to the Social Security wage base. That base is $192,300 for 2027, so the most anyone pays in a year on one job is $865.35. For a tradesperson on $1,000 a week, the cap never comes into play.

The employee share isn’t optional for you to collect. The statute says the employer “shall deduct” it, unless you choose to pay some or all of it yourself. A deduction you forget to take counts as a choice to pay it. You can’t take it back from a later paycheck. So if you don’t update your payroll before the first pay date of January, that week’s contributions come out of your pocket.

Here is how it works out for a remodeling company with seven employees, all working in Maryland and each paid $1,000 a week. This is an illustration; your own figures follow your payroll.

Each worker pays $58.50 a quarter, or $234 over the year. You send the $409.50 for January to March with the first report, due April 30, 2027.

How the state counts your 15 employees

The small-employer rule is where a contractor’s numbers can surprise them. Under COMAR 09.42.02.06, the count is everyone you paid any wages to in the quarter, in Maryland or anywhere else, under the same EIN. It’s a headcount, not full-time equivalents. Independent contractors don’t count.

• In 2027 the test runs every quarter. A crew of 12 regulars that takes on four summer helpers, even for two weeks, has paid 16 people that quarter and owes the employer share for it.
• From 2028, the state averages the previous year’s four quarters and applies the result to the whole of the next year.
• Report your out-of-state headcount. The quarterly report asks for the number of employees you paid outside Maryland. If you leave it out, the regulations say you are “deemed to not be a small employer”. That costs you the employer share for the quarter.

Calling a helper a 1099 subcontractor doesn’t take them out of the count if they are really an employee. Our guide to hiring your first employee walks through that classification question.

Crews that cross into DC or Virginia

FAMLI follows where the work is based, not where the worker lives. The state’s shorthand is that if you pay Maryland unemployment insurance for an employee, that employee is covered by FAMLI, including for the days your Silver Spring crew spends on a job in DC. A worker whose unemployment insurance is reported to another state is outside FAMLI, though they still count toward your 15.

DC runs its own paid family leave program. Its 2026 rate is 0.75% of wages, and the employer pays all of it, with no deduction from the worker. If you also have staff based in DC, that’s a separate account and a separate cost.

What to have done before the first January pay date

The regulations require you to tell employees in writing at least one pay period before the deductions start. For a weekly payroll, that means a notice in December. The state says it will publish sample notices, so check the FAMLI site for the template before you write your own. You’ll also owe a notice when you hire someone, every year, and from July 2027 ahead of the leave benefits starting.

Then set up the deduction with your payroll provider, decide whether you’ll cover any of the worker’s share, and confirm how your first 2027 payroll is treated if it pays for work done in late December. If you were weighing a private insurance plan instead of the state plan, the window to declare that intent closes on November 15, 2026.

Late payment has a price. The state gives you 30 days to fix a shortfall, then can charge interest of 1.5% a month and an extra assessment of up to twice the unpaid contributions. Our roundup of 2027 state minimum wage changes shows Maryland’s statewide rate staying at $15.00, while Howard and Montgomery counties set their own. Our 2027 payroll and tax trends hub collects the federal changes.

The same crew at 15

Now take the remodeling company in a busy quarter when it pays 15 people, all in Maryland and all on $1,000 a week. Each worker still pays $4.50 a week. But the company now adds its own $4.50 per worker, and the quarterly payment goes from $409.50 to $1,755, of which $877.50 is the employer’s own money. Over a full year at that size, the employer share comes to about $3,510.

That’s still modest next to other payroll costs, and it’s a number you can quote around. If your headcount sits near 15, count the people you pay each quarter, and put the employer share into your labor rate for the busy months. Our article on health reimbursement for a small crew covers another benefit cost that changes with headcount.