Maryland Paid Family Leave 2027: Employer Guide

Written by Kristen O’Connell, CPP

Maryland paid family leave is entering a critical implementation phase for employers. Beginning January 1, 2027, Maryland businesses will need to begin payroll contributions under the state's Family and Medical Leave Insurance (FAMLI) program. Employers should prepare now for new withholding, reporting, remittance, employee-notice, and leave-administration requirements.

What Is Changing With Maryland Paid Family Leave in 2027?

Maryland Department of Labor’s FAMLI overview: Maryland's FAMLI program will provide eligible workers with up to 12 weeks of job-protected paid leave annually, with benefits of up to $1,000 per week, for specified family, medical, and military-related reasons. The program has two different implementation dates employers should keep straight. Contributions begin a full year before benefits become available.

Employers with at least one employee in Maryland are generally required to register for FAMLI. After registration, employers are automatically enrolled in the State Plan unless they pursue and receive approval for an eligible private plan.

What Is the Maryland Paid Family Leave Rate for 2027?

For employers participating in Maryland’s State Plan, the 2027 contribution rate is 0.9% of wages up to the Social Security wage cap. The rate applies to wages paid from January 1 through December 31, 2027. Maryland’s contribution guidance explains how the cost is allocated based on employer size.

Employers With 15 or More Employees

• The total State Plan contribution is 0.9%.
• Employers may withhold up to 0.45% from employees’ wages.
• The employer generally funds the remaining 0.45%.
• Employers may choose to pay some or all of the employee share.

For example, if an employee has $100,000 of wages subject to FAMLI contributions during 2027, the employee deduction could be up to $450 for the year, assuming the wages remain below the applicable Social Security wage cap.

Employers With Fewer Than 15 Employees

Small employers are not exempt from FAMLI. Employers with fewer than 15 total employees are not required to pay a separate employer-funded contribution under the State Plan. The applicable contribution is generally 0.45% of covered wages, which the employer may withhold from employees and must remit to Maryland. A small employer may elect to pay some or all of that amount on behalf of its employees.

Employer size is especially important for multi-state businesses. Maryland counts employees under the same federal Employer Identification Number (EIN), including employees working both inside and outside Maryland. During 2027, FAMLI will determine employer size each quarter based on Quarterly Wage and Hour Reports.

What Must Employers Do Before January 1, 2027?

For many employers, the biggest risk is treating FAMLI as a simple new deduction. The program also adds registration, reporting, notice, and process requirements. Employers should address the following items before year-end.

1. Register With Maryland FAMLI

Employers with at least one employee in Maryland are required to register online. Initial registration must be completed by an Authorized Officer. Maryland’s employer registration guidance explains who may serve in that role and how registration is organized by EIN.

A payroll provider, CPA, or other Third-Party Agent cannot complete the employer's initial registration. After an Authorized Officer registers the employer, the employer can authorize a Third-Party Agent to assist with quarterly reports, contribution remittances, and other FAMLI responsibilities.

2. Confirm Your Payroll Setup

Contact your payroll provider before the first payroll of 2027 and confirm that the system is prepared to:

• Apply the correct Maryland FAMLI contribution rate.

• Withhold the correct employee share.

• Apply the Social Security wage cap correctly.

• Identify employees working in positions localized in Maryland.

• Capture the wage and hour information required for quarterly reporting.

• Support quarterly remittance and reporting, if those services are included in your payroll arrangement.

Employers using an outside payroll provider should confirm exactly who will file the Maryland reports and who will remit contributions. Do not assume every FAMLI responsibility is automatically included in a standard payroll service.

An employee's residence alone does not necessarily determine coverage. Employers should evaluate where the employee's work is localized under Maryland's FAMLI rules, particularly for remote and multi-state employees.

3. Notify Employees Before Deductions Begin

Employers that will withhold employee contributions must provide written notice at least one pay period before deductions begin. Maryland will also require additional employee notices beginning in July 2027 and at specified points during employment or when an employee requests or appears to need qualifying leave. See Maryland’s employer guidance for current notice requirements.

4. Review Whether a Private Plan Is Appropriate

Employers may use a Maryland-approved private plan instead of the State Plan if the plan meets program requirements. Employers that intend to apply for a private plan in 2027 and want to qualify for the seeding-period contribution exemption must submit a Declaration of Intent between September 1 and November 15, 2026. Employers considering this route should review Maryland’s private plan guidance promptly because the 2026 filing window is time-sensitive.

The Declaration of Intent is not the private-plan application. It is a preliminary step for employers seeking the seeding-period contribution exemption; the formal private-plan application process occurs in 2027.

When Are Maryland FAMLI Reports and Contributions Due?

State Plan contributions and Quarterly Wage and Hour Reports are generally due electronically by the last day of the month following each calendar quarter. The first report and contribution payment are due April 30, 2027.

Quarterly Reporting Guidance

All employers must submit Quarterly Wage and Hour Reports, including employers using private plans. Reports include employee information such as full name, Social Security number or ITIN, gross wages, wages subject to FAMLI contributions, FICA status, employee withholding, and hours worked. Maryland's file layout also identifies certain optional fields, including job title and SOC code.

If a contribution-payment due date falls on a Saturday, Sunday, or legal holiday, Maryland generally treats a payment received on the next business day as timely.

Why Payroll Testing Before 2027 Matters

Maryland generally does not allow employers to retroactively collect a missed employee contribution after the pay cycle ends. If an employee's paycheck is insufficient to cover the contribution, Maryland generally allows the employer up to six pay periods to collect the amount. Testing payroll settings before the first 2027 payroll can help prevent an avoidable employer cost or correction issue.

Maryland FAMLI Employer Checklist for 2027

• Register the employer with Maryland FAMLI.

• Determine whether the business will use the State Plan or pursue a private plan.

• Confirm whether the employer is above or below the 15-employee threshold.

• Identify employees working in positions localized in Maryland.

• Confirm the 2027 withholding and employer contribution setup with the payroll provider.

• Confirm who will prepare and submit Quarterly Wage and Hour Reports.

• Confirm who will remit State Plan contributions.

• Provide employees with the required written notice before withholding begins.

• Verify payroll and timekeeping systems can capture required wage and hour data.

• Test the payroll configuration before the first 2027 payroll.

• Coordinate FAMLI administration with existing paid time off, parental leave, short-term disability, and other applicable leave programs.

• Calendar the September 1 through November 15, 2026 Declaration of Intent window if a private plan is being considered.

• If using a Third-Party Agent, complete the required authorization after employer registration.

• Confirm the process for correcting Quarterly Wage and Hour Reports and contribution errors.

• Confirm that payroll and reporting systems capture FICA status, covered wages, employee withholding, and hours worked.

• Review procedures for maintaining health benefits during FAMLI leave and restoring an employee to the same or an equivalent position.

• Establish procedures for the July 2027, new-hire, annual, leave-request, and employer-knowledge notices.

• Document whether the employer will withhold the employee share or pay some or all of it.

• Confirm that an Authorized Officer, not the payroll provider or CPA, completes the initial registration.

Frequently Asked Questions About Maryland Paid Family Leave

Does Maryland have paid family leave?

Yes. Maryland’s Family and Medical Leave Insurance program will provide eligible workers with paid family and medical leave benefits beginning January 1, 2028. Payroll contributions begin January 1, 2027.

When does Maryland paid family leave start?

There are two important dates: contributions begin January 1, 2027, and eligible employees can begin receiving FAMLI benefits January 1, 2028.

How does an employee qualify for Maryland FAMLI benefits?

Beginning January 1, 2028, an employee generally will qualify for benefits after working at least 680 hours in a position localized in Maryland during the four reported calendar quarters before the employee applies or the leave begins, whichever occurs first. Accurate quarterly hours reporting is therefore important to the benefit-eligibility process.

What is the Maryland paid family leave contribution rate for 2027?

For the State Plan, the 2027 total contribution rate is 0.9% of wages up to the Social Security wage cap.

How much can Maryland employers deduct from employees’ paychecks?

Employers may generally withhold up to 50% of the State Plan contribution rate. For 2027, that means up to 0.45% of wages subject to the contribution cap.

Do employers with fewer than 15 employees have to participate?

Yes. Employers with fewer than 15 employees generally are not required to fund a separate employer share, but they remain responsible for withholding and remitting the applicable employee contribution and for registration, reporting, notice, and other compliance responsibilities.

Does Maryland count only Maryland employees toward the 15-employee threshold?

No. Employer size generally includes employees under the same EIN working both inside and outside Maryland.

Can an employer pay the employee’s share of FAMLI?

Yes. Employers may elect to pay some or all of the employee contribution. Employers should consider potential tax implications before making that decision.

When are Maryland FAMLI contributions due?

State Plan contributions are remitted quarterly. The first payment, covering January through March 2027 wages, is due April 30, 2027.

Do employers have to notify employees about the new payroll deduction?

Yes. Employers collecting employee contributions must provide written notice at least one pay period before withholding begins.

Can employers use a private plan instead of Maryland’s State Plan?

Yes, if the plan is approved by the Maryland FAMLI Division and satisfies program requirements. Special 2026 deadlines apply to employers seeking a private plan and seeding-period contribution exemption.

What Leave-Administration Duties Should Employers Prepare For?

When benefits become available, employers generally must maintain an employee's health benefits during FAMLI leave and return the employee to the same or an equivalent position. Employers should prepare procedures for leave intake, benefit continuation, payroll coordination, and return to work before January 1, 2028.

Prepare for Maryland FAMLI Before Year-End

Maryland FAMLI affects more than a single payroll deduction. Employers may need to coordinate payroll configuration, employee notices, quarterly reporting, timekeeping data, and remittance responsibilities before January 1, 2027.

Trout CPA’s Payroll Administration team can help businesses review their payroll processes and prepare for new payroll and reporting requirements. Our Outsourced Accounting team can also help businesses strengthen day-to-day accounting and financial processes as requirements evolve.