Delaware PFML contributions began with employee check dates effective January 1, 2025. Employers with 10 to 24 Delaware employees contribute 0.32% of covered wages; employers with 25 or more contribute 0.8%. Up to half may be deducted from employees.
To be covered by the program, for the purposes of employee count and contributions in a particular quarter, an employee must work approximately 60% or more of their hours/earnings in Delaware. This is estimated and determined by the agency based on the employee's in-state and out-of-state wages reported on quarterly hour and wage reports.
| Delaware employee count | Lines of coverage required | Total contribution rate |
|---|
| 9 or fewer | Exempt | None |
| 10 to 24 | Parental Leave 0.32% | 0.32% |
| 25 or more | Parental Leave 0.32%, Family Leave 0.08%, Medical Leave 0.4% | 0.8% |
Employee deductions. Employers may deduct up to 50% of these contributions from employees through payroll deductions. The state agency and the payroll system both treat the deduction of the full 50% as the default choice by employers.
Employer and employee split at the default 50% deduction
| Delaware employee count | EE PFML | ER PFML |
|---|
| 10 to 24 | 0.16% | 0.16% |
| 25 or more | 0.4% | 0.4% |
Employee count
To calculate the number of employees for the purposes of determining required lines of coverage:
- Count every covered employee.
- Add Reclassified employees (discussed below).
- Subtract Waived employees (discussed below).
If an employer crosses a coverage threshold, they must:
- Notify employees at least 30 days prior to deducting contributions for new lines of coverage.
- Begin collecting contributions for that additional coverage within 5 weeks.
Note: employers can gain lines of coverage by crossing an employee count threshold at any time, but employers only lose lines of coverage by staying below an employee count threshold for 13 consecutive months - 12 months to lose the line of coverage and 30 days to provide notice to employees of the loss of coverage.
Important: it is the employer's responsibility to monitor and initiate any payroll system changes required based on these changes in employee count and applicable lines of coverage. If an employer crosses an employee count threshold that requires an additional line of coverage, the employer must act comparatively quickly to notify employees and update the required payroll system "Employee Headcount" value on the DE Employer PFML Tax Code located on the Company Tax Election user interface.
A standard report is available in the Report Library to help determine when and if your employee headcount coverage thresholds have changed. We recommend running this report after every payroll process to prepare for any needed action.
Special employee circumstances
Reclassification
- Employees who do not work at least 60% of the time in Delaware but are connected to a Delaware work location in some way may be Reclassified as covered by the program.
- Both the employee and employer must complete a formal Reclassification process with the Delaware PFML agency, requiring agency approval of a form submitted by the employer.
- For a Reclassified employee, both in-state and out-of-state wages are covered for the purposes of calculating contribution and benefit amounts.
Waivers
- Employees who are covered for the purposes of contributions but whose employment is not expected to meet the requirements of benefits eligibility - because they are expected to work short-term (less than a year) or very part-time (less than 1,250 hours per year) - may be Waived from contribution coverage.
- Both the employee and employer must complete a formal Waiver process with the Delaware PFML agency, requiring agency approval of a form submitted by the employer.
- For a Waived employee, contributions are not required, but the employee must still be reported on the quarterly hour and wage report.
Private plans
- Employers may provide paid leave coverage as an alternative to the state program through a private insurance plan or, if the employer has at least 100 employees, self-insurance.
- For a private plan to be recognized by the state agency, the employer must complete a formal approval process. Applications to the agency are open from September 1 through December 1 for plans effective in the subsequent calendar year.
- For 2025, the deadline to submit an application to use a private insurance policy was extended to December 15, 2024.
- An employer with an approved private plan is not required to make or deduct contributions; however, employee details must still be reported on quarterly hour and wage reports.
Form W-2
Employee contributions will be reported in box 14 of Form W-2 with the label DEPFML.
For additional information and other employer requirements related to this program, see the Delaware Paid Leave website.
Part 2: payroll system setup
By default, CoAd automatically calculates DE PFML taxes for covered employers and employees based on the assignment of a Delaware company location as the employee's "primary work location" on the employee's payroll profile setup. Employee earnings associated with a Delaware work location on the payroll process are the source of DE PFML tax calculations. There are three ways Delaware work-location earnings are established:
- Assigning a Delaware primary work location at the employee level drives Delaware work-location-based earnings in the payroll system.
- Adjusting or overriding the employee location to a Delaware location directly within the existing payroll process "Pay Entry" or "Tax Adjustment" functionality.
- Delaware residents assigned a "Work at Home" primary work location will also result in Delaware-based earnings and PFML tax calculations.
CoAd Pay DE PFML employer and employee automated tax code calculations are a direct result of the total Employee Headcount value of 10 or more that you assign at the company level, which automatically determines the appropriate PFML tax rate applied to employees' earnings in Delaware work locations only.
Review the material below and confirm that you have the appropriate payroll system setup for your circumstances. If your payroll system tax setup does not accurately reflect the appropriate setup based on the employee count you have determined or other factors, send a support ticket to have this setup modified.
Tax codes
Important: if BOTH the pay period begin and end date fall in the month of December 2024 and the check date is January 1, 2025 or later, you must edit both the Employer and Employee Delaware PFML taxes on the Company Tax Election user interface to make the tax "START" or effective date equal to the beginning of the December 2024 pay period, so the PFML taxes calculate accurately. If you do not update the START date, the system will use default tax setups and may produce inaccurate wage and/or tax calculations. This action is only relevant for the initial months of December 2024 and January 2025, when pay period dates and check dates cross tax years and you do not want the default system behavior, which defaults to the higher 0.8% tax rate based on a default employee headcount of 25. Pay periods and check dates that both have 2025 dates will perform as expected: no effective date is needed, and the tax does not need to be added on the Company Tax Election user interface.
Employer paying the employee portion
The following payroll system setup is used for an employer to pay part or all of the employee portion of DE PFML contributions, instead of the default system calculations described above.
If an employer has chosen to pay the entirety of the employee portion: within the Delaware Employer PFML tax code "Employee Contribution %" field under Company Tax Election, update the "Employee Contribution %" value to zero. Only the Employer DE PFML tax will then calculate, at either 0.32% or 0.8% depending on the "Number of Employee" headcount value entered.
If an employer has chosen to pay a percentage other than 100% of the employee portion: within the Delaware Employer PFML tax code "Employee Contribution %" field under Company Tax Election, update the "Employee Contribution %" value to the percentage of the total tax that you want employees to pay. The Employer DE PFML tax will then automatically calculate at the tax percentage needed to reach either 0.32% or 0.8% in total, less the employee contribution percentage entered, and depending on the "Number of Employee" headcount value entered.
Delaware work location required
Only an employee's earnings associated with a Delaware work location on a payroll will be taxed by any DE PFML tax code in the payroll system. Under the "Pay Entry" or "Tax Adjustment" Location batch entry field within the Payroll Process, you can ensure that the work location is a Delaware location associated with an employee's earnings code for DE PFML tax calculations.
Reclassified employees
If an employee has an approved "Reclassified" status from the DE PFML agency, reach out to the CoAd support team for instructions on how to accurately process the PFML taxes. The CoAd product is still being developed to accommodate this special circumstance, and a temporary workaround will be required on your part.
Action required: DE PFML Reclassified employees require DE PFML payroll system taxes to be calculated on both in-state and out-of-state covered wages, not just wages associated with a Delaware work location. Payroll process adjustments to DE PFML Gross Wages, Subject Wages and Gross Subject Wages will be required before committing the payroll process, so that accurate DE PFML taxes are calculated on all wages earned in and out of the state of Delaware.
Waived employees
If an employee has received an approved "Waiver" status from the DE PFML agency, reach out to the CoAd support team for instructions on how to accurately process the PFML taxes. The CoAd product is still being developed to accommodate this special circumstance, and a temporary workaround will be required on your part.
Action required: payroll process adjustments must be made to zero out calculated DE PFML tax amounts for this employee, while still allowing CoAd to collect the employee wage details required for DE PFML quarterly hour and wage reporting.
Employer exempt from PFML tax and reporting
If you as an employer are excluded from both the employee/employer Delaware PFML tax and the reporting requirements, check the "Company Tax Exempt" field on both the Employee and Employer Delaware PFML tax setup on the Company Tax Election user interface. No tax will be calculated, and Subject Wages and Gross Subject Wages will also be zero. No tax reporting is required in this scenario.
Private plan setup
An employer with an approved private plan must have the "Private Plan" checkbox selected for the Employer DE PFML payroll system tax code under the Company Tax Agency Identifier user interface.
Action required: an employer should also create a support ticket to inform CoAd that they plan to use a private plan.
System assistance with employee count and coverage
A standard report has been developed to help employers monitor their employee count and employee coverage changes, and is available in the Report Library. The report can be generated by selecting the quarter data that applies. Generate this report after each pay process is completed, and at minimum before the end of the current tax quarter, to support the analysis of employee status and coverage and of employee headcount totals - which determine accurate PFML tax rate calculations and quarterly wage reporting in the CoAd Pay system.
Frequently asked questions
Which employers have to participate in Delaware Paid Family and Medical Leave?
In general, employers with 10 or more Delaware-based employees are required to participate in the program. Federal-government and certain seasonal employers are exempt, and unlike Delaware unemployment insurance tax, certain religious organizations and non-profit organizations are covered and are required to remit contributions.
What are the Delaware PFML contribution rates?
The required lines of coverage and total contribution rates depend on the Delaware employee count. Employers with 9 or fewer Delaware employees are exempt; employers with 10 to 24 pay 0.32% for Parental Leave; and employers with 25 or more pay 0.32% for Parental Leave, 0.08% for Family Leave and 0.4% for Medical Leave.
How much of the DE PFML contribution can I deduct from employees?
Employers may deduct up to 50% of these contributions from employees through payroll deductions, and both the state agency and the payroll system treat the full 50% deduction as the default. At a 50% deduction, an employer with 10 to 24 covered employees has EE PFML of 0.16% and ER PFML of 0.16%, while an employer with 25 or more has EE PFML of 0.4% and ER PFML of 0.4%.
Which employees count as covered by Delaware PFML?
For the purposes of employee count and contributions in a particular quarter, an employee must work approximately 60% or more of their hours or earnings in Delaware. The agency estimates and determines this from the employee's in-state and out-of-state wages reported on quarterly hour and wage reports, so an employee can gain or lose coverage each quarter.
What happens if I do not deduct the employee share of contributions?
If an employer fails to deduct a portion of the employee share of contributions from wages paid during a pay period, the agency considers the employer to have elected to pay that portion of the employee share.
Delaware PFML setup details recovered from the original screenshots
Tax jurisdiction codes
| Code | Jurisdiction | Tax name |
|---|
| 522902 | Delaware State | Delaware Paid Leave - Employee |
| 522901 | Delaware State | Delaware Paid Leave - Employer |
Adding the tax jurisdiction
The Add Tax Jurisdiction screen requires a Start date (marked with a red asterisk) with a date-picker beside it. Set the effective start date for the jurisdiction here.
Company Tax Agency Identifier
The Edit Company Tax Agency Identifier screen carries these fields:
| Field | Value in the example |
|---|
| Pay Unit | All |
| Tax | Delaware Paid Leave - Employer |
| Agency Filing ID (required) | your Delaware filing ID |
| Active Tax Filing | Yes |
| Private Plan (W2 Box 14 Reporting) | Yes |
