Maine Paid Family and Medical Leave (PFML): Contribution Rates and CoAd Pay Tax Codes

Maine PFML contributions began with employee check dates effective January 1, 2025. Employers with fewer than 15 covered employees remit 0.5% of covered wages; employers with 15 or more remit 1%.

Client action required

Review the information below and ensure your employees have the appropriate payroll system setup, with special attention 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, create a support ticket to have this setup modified.
Once the ME PFML agency portal becomes available in early January 2025, register your business in the state agency portal and assign CoAd as your third-party administrator.
After January 10, 2025, when this feature is released, have your employee count entered into the payroll system with the Effective Year: 2025.

Part 1: law and agency rules

Covered employers

In general, employers with employees performing work localized in Maine are covered.
Unlike the Maine unemployment insurance tax, certain religious organizations and non-profit organizations are covered by the Maine PFML program and are required to remit contributions.

Covered employees

In general, employees who earn wages for work localized in Maine are covered.
Federal employment, federal work-study financial aid, employment during incarceration, certain volunteer work, and the work of an employee subject to the federal Railroad Unemployment Insurance Act are not covered.

Contribution calculation

Covered wages. Covered wages are calculated in a manner similar to the Maine unemployment insurance tax:

The PFML program uses the same test of locality as the Maine unemployment insurance tax.
Pre-tax deductions and exclusions also follow Maine unemployment insurance tax rules.
However, subject wages up to the annual Social Security wage base limit are included.

Rates by employer size

Covered employees	Total contribution rate	Maximum deductible from employees	Standard setup
Fewer than 15	0.5% of covered wages	Up to 100% of the total rate	Employee portion: 0.5%
15 or more	1% of covered wages	Up to 50% of the total rate	Employer portion: 0.5%; Employee portion: 0.5%

Employee count

For the purposes of determining premium liability, any employer that employed 15 or more covered employees per that employer's Federal Employer Identification Number (FEIN) on their established payroll in 20 or more calendar workweeks in the 12-month period preceding September 30th of each year will be considered an employer of 15 or more employees for the calendar year thereafter.

This count includes the total number of covered employees on establishment payrolls employed full or part time who received pay for any part of the pay period.
Temporary and intermittent employees are included, as are any workers who are on paid sick leave, on paid holiday, or who work during only part of the specified pay period.

Employee count reporting to the agency. The employee count for the period covering October 1 of the previous year to September 30 of the current year is reported on the third quarter ME PFML return, to inform the agency of the employer's employee count applicable for the subsequent calendar year.

Private plan

Employers may provide paid leave coverage as an alternative to the state program through a fully-insured plan through an insurance company, or through a self-insured plan.
For a private plan to be recognized by the state agency, a formal approval process is required. The initial private plan application process opened on April 1, 2025.
Private plans are effective in the quarter they are approved, unless they are approved within the final 30 days of the quarter, in which case they are effective in the subsequent quarter.
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 are reported in box 14 of Form W-2 with the label MEPFML.

For additional information and other employer requirements related to this program, see the Maine Paid Family & Medical Leave page.

Part 2: payroll system setup

CoAd assigned the ME PFML tax codes to existing employers and employees based on the assignment of the ME unemployment insurance tax payroll system code and an employee count for that code for the period from October 1, 2023, through September 30, 2024.

When the ME unemployment insurance payroll system tax code is newly assigned to an employer, the payroll system automatically assigns the payroll system tax codes for the employer and employee portions of ME PFML to that employer; these tax codes must be manually added to employees.

Review the material below and confirm that you have the appropriate payroll system tax codes assigned to you and your employees, and that the appropriate payroll system selections are 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.

Tax codes

Tax code	What it covers
MEEEPFMLEE	Employee portion of ME PFML
MEERPFML	Employer portion of ME PFML
MEERPFMLEE	Employee portion paid by the employer

Which tax codes you should have assigned:

An employer with fewer than 15 employees should have MEEEPFMLEE, the employee portion of ME PFML, assigned to them and their covered employees.
An employer with 15 or more employees should have both MEEEPFMLEE (employee portion) and MEERPFML (employer portion) assigned to them and their covered employees.

Employer paying the employee portion

MEERPFMLEE is the payroll system code used for an employer to pay part or all of the employee portion of ME PFML contributions.

If an employer has chosen to pay the entirety of the employee portion:

Assign the MEERPFMLEE tax code to the employer and covered employees.
Within the MEERPFMLEE tax code, in Tax Administration under Employer Setup, ensure that the Use System Rate checkbox is selected.
Delete or Exempt the MEEEPFMLEE tax code from applicable employees.

If an employer has chosen to pay a percentage of the employee portion:

Assign the MEERPFMLEE tax code to the employer and covered employees.
Within the MEERPFMLEE tax code, in 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.
Assign the MEEEPFMLEE tax code to the employer and covered employees.
Within the MEEEPFMLEE tax code, in 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.
Ensure that the sum of the percentages entered in the Percent of Rate fields under MEERPFMLEE and MEEEPFMLEE equals 100%.

Note: if an employer is considered a large employer for the purposes of the ME PFML program, because they had 15 or more covered employees during the lookback period, they should also have the payroll system tax code for the standard employer portion, MEERPFML, assigned to them and their covered employees under both scenarios described above.

Example: a large employer has chosen to pay 60% of the employee portion of ME PFML.

Assign MEERPFML, the employer portion tax code, to the employer and covered employees.
Assign MEEEPFMLEE, the employee portion tax code, to the employer and covered employees.
Assign MEERPFMLEE, the employee portion paid by the employer tax code, to the employer and covered employees.
Within the MEERPFMLEE tax code, in Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter 60 in the Percent of Rate field.
Within the MEEEPFMLEE tax code, in 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

The following table outlines the appropriate tax code setup for different employer scenarios. If a cell contains text, the corresponding tax code should be assigned to the employer and their covered employees under the scenario described. The text in 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 that tax code within Tax Administration under Employer Setup.

Scenario	MEEEPFMLEE	MEERPFML	MEERPFMLEE
Fewer than 15 employees	Use System Rate
Fewer than 15 employees; employer pays a part of EE portion			Use System Rate
Fewer than 15 employees; employer pays a part of EE portion	Percent of Rate		Percent of Rate
15 or more employees	Use System Rate	Use System Rate
15 or more employees; employer pays 100% of EE portion		Use System Rate	Use System Rate
15 or more employees; employer pays a part of EE portion	Percent of Rate	Use System Rate	Percent of Rate

Private plan

If you plan to have a private plan approved beginning on April 1, 2025, or later, contact a support representative.

Employee count reporting in the payroll system

Enter your employee count with an effective year in the Employee Count field, in the PFML Related section under Tax Administration within Employer Setup, for any ME PFML payroll system tax code.

After January 10, 2025, enter the employee count you used to determine employer size for portal registration with Effective Year: 2025.
This field is used to monitor appropriate tax assignment and for Q3 quarterly reporting each year.
The employee count reflected in Q3 reporting is the count associated with the Effective Year of the subsequent year. For example, the employee count reported with the Q3 2025 return is the count associated with Effective Year: 2026.

Standard report to assist with employee count

A standard report is being developed to assist employers with monitoring their employee count and will be available in early 2025. Additional information regarding the new report will be available for review in Q1 of 2025.

Frequently asked questions

When did Maine PFML contributions start being collected?

Employer and employee contributions for the Maine Paid Family and Medical Leave program began to be collected with employee check dates effective January 1, 2025.

What are the Maine PFML contribution rates?

Employers with fewer than 15 covered employees are required to remit 0.5% of covered wages, and up to 100% of that total contribution rate may be deducted from employee covered wages. Employers with 15 or more covered employees are required to remit 1% of covered wages, and up to 50% of that total may be deducted from employee covered wages.

How is the 15-employee threshold determined?

Any employer that employed 15 or more covered employees per that employer's Federal Employer Identification Number on their established payroll in 20 or more calendar workweeks in the 12-month period preceding September 30 of each year is considered an employer of 15 or more employees for the calendar year thereafter. The count includes full- and part-time covered employees who received pay for any part of the pay period, including temporary and intermittent employees and workers on paid sick leave or paid holiday.

Which employers and employees are covered by Maine PFML?

In general, employers with employees performing work localized in Maine are covered, and unlike the Maine unemployment insurance tax, certain religious organizations and non-profit organizations are covered and must remit contributions. Federal employment, federal work-study financial aid, employment during incarceration, certain volunteer work, and the work of an employee subject to the federal Railroad Unemployment Insurance Act are not covered.