Employers with 10 or more Delaware-based employees must contribute to the Delaware Paid Family and Medical Leave (PFML) program. Contributions began with employee check dates effective January 1, 2025, and employers may deduct up to 50% from employees.
Client action required
- Register your business in the state agency portal and assign CoAd as your third-party administrator.
- Review the information below and ensure that your employees have the appropriate payroll system setup, with special attention given to your employee count and the payroll system tax codes assigned to you and your employees.
- 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.
Part 1: Law and agency rules
Registration
If you are a covered DE employer, complete the LaborFirst registration process and assign CoAd as your third-party administrator (TPA).
- LaborFirst is the portal that will be used for DE PFML reporting and administration.
- Information on this process can be found on the DE Department of Labor page.
- Step-by-step instructions can be found in the DE Department of Labor document.
Covered employers
- 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 from the program.
- Unlike the Delaware unemployment insurance tax, certain religious organizations and non-profit organizations are covered by the Delaware PFML program and are required to remit contributions.
Covered 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 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.
Important: An employee can gain or lose coverage for the program each quarter based on the distribution of their in-state and out-of-state wages in that quarter. It is the employer's responsibility to monitor and initiate any payroll system changes required because of these changes in employee coverage.
Covered wages
- Pre-tax deductions and exclusions follow FICA rules.
- Only wages earned in Delaware are included.
- Only wages up to the Social Security wage base limit are included.
- This is a separate Delaware wage base limit only counting Delaware wages, except in the case of a Reclassified employee, for which both in-state and out-of-state wages are included in this wage base limit.
Contribution rates
Required lines of coverage, and total contribution rates, differ based on whether an employer has surpassed the following employee count thresholds.
| DE employees | Parental Leave | Family Leave | Medical Leave |
| 9 or fewer | Exempt | Exempt | Exempt |
| 10 to 24 | 0.32% | Not required | Not required |
| 25 or more | 0.32% | 0.08% | 0.4% |
Employee deductions
Employers may deduct up to 50% of these contributions from employees through payroll deductions. The state agency and payroll system both treat the deduction of the full 50% as the default choice by employers.
For an employer with 10 to 24 covered employees that deducts 50% of the required total contribution from employees:
| Line of coverage | Employee (EE) rate | Employer (ER) rate |
| Parental Leave | 0.16% | 0.16% |
For an employer with 25 or more covered employees that deducts 50% of the required total contribution from employees:
| Line of coverage | Employee (EE) rate | Employer (ER) rate |
| Parental Leave | 0.16% | 0.16% |
| Family Leave | 0.04% | 0.04% |
| Medical Leave | 0.2% | 0.2% |
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 add the required payroll system tax codes to the employer and all covered employees.
Special employee circumstances
Reclassification
- Employees that 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 agency.
- 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 agency.
- 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, with applications to the agency 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
CoAd has assigned DE PFML payroll system tax codes to employers and employees based on an employee count associated with Delaware Work Locations.
When the DE state income tax withholding payroll system tax code is newly assigned to an employer, the payroll system will automatically assign the payroll system tax codes for the employer and employee portions of all DE PFML to that employer. These tax codes are required to be manually added to employees.
Review the material below and confirm within the payroll system that you have the appropriate payroll system tax codes assigned to you and your employees, and the appropriate payroll system selections made 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.
Standard DE PFML tax codes
| Tax code | What it covers |
| DEEEPL | Employee portion of Parental Leave |
| DEEEPML | Employee portion of Medical Leave |
| DEEEPFL | Employee portion of Family Leave |
| DEERPL | Employer portion of Parental Leave |
| DEERPML | Employer portion of Medical Leave |
| DEERPFL | Employer portion of Family Leave |
- An employer with 10 to 24 covered employees should have DEEEPL and DEERPL assigned to them and their covered employees, covering the employer and employee portions of Parental Leave.
- An employer with 25 or more covered employees should have all six tax codes listed above assigned to them and their covered employees, covering the employer and employee portions of Parental Leave, Medical Leave, and Family Leave.
Employer paying the employee portion
If an employer chooses to pay a part or all of the employee portion of these taxes, the applicable tax codes from the following list should also be assigned to them and their covered employees:
| Tax code | What it covers |
| DEERPLEE | Employee portion of Parental Leave paid by Employer |
| DEERPMLEE | Employee portion of Medical Leave paid by Employer |
| DEERPFLEE | Employee portion of Family Leave paid by Employer |
If an employer has chosen to pay the entirety of an employee portion line of coverage:
- Assign the applicable employer-paying-employee-portion DE PFML tax code from above to the employer and covered employees.
- Within this DE PFML tax code within Tax Administration under Employer Setup, ensure that the Use System Rate checkbox is selected.
- Delete or exempt the applicable DE PFML employee portion tax code from applicable employees.
If an employer has chosen to pay a percentage of an employee portion line of coverage:
- Assign the applicable employer-paying-employee-portion DE PFML tax code from above to the employer and covered employees.
- Assign the applicable employee portion DE PFML tax code to the employer and covered employees.
- Within the applicable employer-paying-employee-portion tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter the percentage of the employee portion rate the employer will pay in the Percent of Rate field.
- Within the applicable employee portion tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter the percentage of the employee portion rate the employee will pay in the Percent of Rate field.
Note: An employer should also have the payroll system tax codes for the standard employer portion of the applicable lines of coverage assigned to the employer and their covered employees.
Example — an employer with 10 to 24 employees has chosen to pay 60% of the employee portion of DE PFML:
- Assign DEERPL, the employer portion of Parental Leave, to the employer and covered employees.
- Assign DEEEPL, the employee portion of Parental Leave, to the employer and covered employees.
- Assign DEERPLEE, the employee portion of Parental Leave paid by the employer, to the employer and covered employees.
- Within the DEERPLEE tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter 60 in the Percent of Rate field.
- Within the DEEEPL tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter 40 in the Percent of Rate field.
Tax code setup by scenario
If a cell contains text, it means that the corresponding tax code should be assigned to the employer and their covered employees under the scenario described. The text within the cell indicates whether the Use System Rate checkbox should be selected, or whether a percentage should be entered in the Percent of Rate field, in the referenced tax code within Tax Administration under Employer Setup. A dash means the tax code is not used in that scenario.
Employers with 10 to 24 covered employees
| Scenario | DEEEPL | DEERPL | DEERPLEE |
| Standard setup | Use System Rate | Use System Rate | — |
| ER pays 100% of EE portion | — | Use System Rate | Use System Rate |
| ER pays a part of EE portion | Percent of Rate | Use System Rate | Percent of Rate |
Employers with 25 or more covered employees
| Scenario | DEEEPL | DEEEPML | DEEEPFL | DEERPL | DEERPML | DEERPFL | DEERPLEE | DEERPMLEE | DEERPFLEE |
| Standard setup | Use System Rate | Use System Rate | Use System Rate | Use System Rate | Use System Rate | Use System Rate | — | — | — |
| ER pays 100% of EE portion | — | — | — | Use System Rate | Use System Rate | Use System Rate | Use System Rate | Use System Rate | Use System Rate |
| ER pays a part of EE portion | Percent of Rate | Percent of Rate | Percent of Rate | Use System Rate | Use System Rate | Use System Rate | Percent of Rate | Percent of Rate | Percent of Rate |
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 Pay Your Employees within Payroll, ensure that the Work Location in the Earnings section is a Delaware location.
Reclassification setup
If an employee has been Reclassified, the DE PFML Reclassified Employee field must be set to Yes in the Misc. Tax Facts section under Taxes within Manage Employees.
If an employee has the DE PFML Reclassified Employee field set to Yes, all assigned DE PFML payroll system taxes will calculate on both in-state and out-of-state covered wages, and not just those wages associated with a Delaware Work Location.
Waiver setup
If an employee has received an approved Waiver, the DE PFML Waived Employee field must be set to Yes in the Misc. Tax Facts section under Taxes within Manage Employees.
Setting the DE PFML Waived Employee field to Yes will stop all DE PFML tax calculations for this employee but will allow CoAd to collect employee details for required quarterly hour and wage reporting.
Private plan setup
An employer with a Private Plan must have the Using Equivalent Plan checkbox selected for a DE PFML payroll system tax code under Tax Administration within Employer Setup for each applicable line of coverage.
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 and other system features are being developed to assist employers with monitoring their employee count and employee coverage changes and will be available in early 2025. Additional information regarding the new report and features will be available for review in Q1 of 2025.
Frequently asked questions
Which employers have to participate in Delaware PFML?
In general, employers with 10 or more Delaware-based employees are required to participate. Federal government and certain seasonal employers are exempt, but unlike the Delaware unemployment insurance tax, certain religious and non-profit organizations are covered and must remit contributions.
What are the Delaware PFML contribution rates?
Employers with 9 or fewer Delaware employees are exempt. Employers with 10 to 24 Delaware employees owe Parental Leave at 0.32%, and employers with 25 or more owe Parental Leave at 0.32%, Family Leave at 0.08%, and Medical Leave at 0.4%.
How much of the Delaware PFML contribution can I deduct from employees?
Employers may deduct up to 50% of these contributions from employees through payroll deductions. Both the state agency and the payroll system treat deducting the full 50% as the employer's default choice.
Which employees count as covered by Delaware PFML?
For employee count and contributions in a particular quarter, an employee must work approximately 60% or more of their hours in Delaware, which the agency estimates from in-state and out-of-state wages reported on quarterly hour and wage reports. An employee can gain or lose coverage each quarter based on that distribution, and it is the employer's responsibility to monitor and initiate any payroll system changes required.
What do I have to do if I cross an employee count threshold?
You must notify employees at least 30 days prior to deducting contributions for the new lines of coverage and begin collecting contributions for that additional coverage within 5 weeks. Employers gain lines of coverage as soon as they cross a threshold, but only lose a line by staying below the threshold for 13 consecutive months, which is 12 months to lose the coverage plus 30 days of notice to employees.