Massachusetts Paid Family and Medical Leave

Massachusetts Paid Family Leave Insurance (FLI) and Medical Leave Insurance (MLI) are taxes for employees subject to Massachusetts state unemployment insurance (SUI).

These taxes consist of these components.

Family Leave Insurance Employee
Family Leave Insurance Employer
Medical Leave Insurance Employee
Medical Leave Insurance Employer

However, there are some areas you should consider.

What is the employee eligibility criteria
How to override the percentage splits
How to opt your organization out of these taxes
How to exclude individual employees
How to cost Paid Family and Medical Leave taxes
What wage basis rules they follow

Employee Eligibility Criteria

The payroll process automatically imposes these taxes on employees when they're subject to Massachusetts SUI.

Override the Percentage Splits

The percentage paid for these taxes must equal 100%.

To change these percentages:

To change these taxes at the payroll statutory unit (PSU) level, start the Legal Entity Calculation Cards task from your implementation project.

Use the Legal Reporting Unit Calculation Cards task to change this tax at the tax reporting unit (TRU) level.

Settings at the TRU level override those at the PSU level.
In Component Groups, select the Massachusetts state regional node.
In Calculation Components, select State FLI.

Create it if it doesn't already exist.
1. Select the Massachusetts regional node in Component Groups.
2. Click Create in Calculation Components.
3. In Create Calculation Component, select State FLI.
4. Select MA.
Click Enterable Calculation Values on the Calculation Card.
Add the FLI Employee Percentage and FLI Employer Percentage components, and set the appropriate values for each.

Enter as a percentage. For example, enter 50% as 50.

The sum of both must equal 100%.
Add the MLI Employee Percentage and MLI Employer Percentage components, and set the appropriate values for each.
Enter as a percentage. For example, enter 50% as 50.
The sum of both must equal 100%.
Save your work.

Opt Out Your Organization

There are cases where you want to exempt an organization from these taxes. For example, Massachusetts allows exemption from the employer MLI liability based on employee eligibility. For further info, see the Massachusetts state tax authority website.

To opt an organization out of these taxes:

To opt out at the PSU level, start the Legal Entity Calculation Cards task from your implementation project.

To opt out at the TRU level, start the Legal Reporting Unit Calculation Cards task.
In Component Groups, choose the Massachusetts state regional node.
In Calculation Components, choose State FLI.

Create it if it doesn't already exist.
1. Select the Massachusetts regional node in Component Groups.
2. Click Create in Calculation Components.
3. In Create Calculation Component, select State FLI.
4. Select MA.
Select Enterable Calculation Values on the Calculation Card.
Select Exempt from Family Leave Insurance to exempt your organization from Massachusetts FLI.

Select Exempt from MLI ER Liability to exempt your organization from Massachusetts MLI.
In Value, enter Yes.
Save your work.

Exclude Individual Employees

To exclude an individual employee from these taxes:

Use the Calculation Cards task to open the person's Tax Withholding card editing.
Choose the Massachusetts state regional node.
In Withholding Exemption, choose Yes for Exempt from Family Leave Insurance.

Cost the Tax

To process FLI taxes, cost these predefined elements using the FLI Tax Calculated input value.

Family Leave Insurance Employee Tax
Family Leave Insurance Employee Tax Not Taken
Medical Leave Insurance Employee
Medical Leave Insurance Employee Tax Not Taken
Medical Leave Insurance Employer

For further info, see Payroll Costing of Elements for the US in the Help Center.

Wage Basis Rules

Massachusetts rules follow Social Security wage basis rules.