Maine uses graduated individual income tax brackets, charges employers unemployment insurance premiums on the first $12,000 of each employee's wages, and began collecting Paid Family and Medical Leave premiums in 2025. Maine has no local income taxes.
Source last updated: 09/12/2025.
Overview
Maine uses a graduated individual income tax with three brackets, requires employers to pay state unemployment insurance premiums on the first $12,000 of each employee's wages, and has recently implemented both an Earned Paid Leave law (accrual-based paid sick leave) and a Paid Family and Medical Leave (PFML) program, with premiums beginning in 2025 and benefits starting later. Maine does not impose local municipal income taxes; local revenue is raised largely via property taxes.
State tax requirements
| Item | Maine requirement |
|---|
| Individual income tax | Graduated brackets (three brackets). For recent rate schedules, see the Maine Revenue Services 2025 rate schedules and tables |
| UI taxable wage base | $12,000 of each employee's wages, on a calendar year basis |
| UI employer rates | Experience-rated. New-employer and initial rates and rate arrays are published by the Maine Department of Labor |
| Local income tax | None |
| New hire reporting | Report hires and rehires promptly; guidance indicates within 7 days |
Employers must follow Maine Revenue Services guidance for employer withholding, returns and withholding deposits.
Paid Family and Medical Leave (PFML) contributions
Premiums and contributions start in 2025, remitted quarterly, to build the PFML fund. Benefits are scheduled to begin May 1, 2026. For calendar years 2025 through 2027, the joint premium rate is set by employer size, and no more than 0.5% may be deducted from employees' wages
| Employer size | Joint premium rate | Maximum deducted from employees |
|---|
| 15 or more employees | 1.0% of wages | Up to half the premium, capped at 0.5% of wages |
| Fewer than 15 employees | 0.5% of wages | The full 0.5% may be deducted from employees |
- Employers remit via the Maine Paid Leave portal, and must register and submit quarterly wage reports and payments.
- Employee premium contributions should be reported in Box 14 on the W-2 as "MEPFML".
- Eligible employees may access PFML benefits of up to 12 weeks in most cases once benefits begin.
- Private-plan substitution is allowed if certified. See the Maine PFML employer FAQ and employer resources for contribution splits, remittance schedules, substitution application windows, penalties and reporting mechanics.
Earned Paid Leave (EPL)
Maine's Earned Paid Leave law (26 M.R.S. §637 and Maine DOL guidance) requires covered employers to provide 1 hour of paid leave for every 40 hours worked, up to 40 hours per year. Accrual begins at the start of employment, and employers may impose a waiting period before use, subject to a statutory limit (for example, 120 days).
Important: LD 55 (2025) amended accrual and carryover rules. Employers should review the statute and Maine DOL guidance for the exact carryover and accrual changes effective September 24, 2025, and update policies and accrual calculations accordingly.
Local tax requirements
Maine does not impose local income taxes in the way some states do. Local government revenue is primarily derived from property taxes and other municipal assessments, so employers generally withhold only state and federal income taxes.
Overtime
Maine enforces overtime consistent with the federal FLSA and Maine's overtime statute: nonexempt employees are entitled to time-and-a-half for hours over 40 in a workweek, unless a specific exemption applies. Employers should follow Maine DOL overtime guidance for calculating the regular rate, overtime in tip-credit situations, and exemptions such as professional, executive, administrative and certain commissioned sales roles.
Tipped employees and the tip credit
Maine law allows an employer to take a tip credit, but the tip credit cannot exceed 50% of the state minimum wage. Employers must ensure that the combined cash wage plus tips equals at least the state minimum wage for all hours worked. Maine DOL guidance addresses calculating overtime for tipped employees, where overtime is computed on the full minimum wage. See the Maine statute and DOL guidance for the current minimum and tip wages.
Rest and meal breaks
Maine does not require private-sector employers to provide paid meal or rest breaks beyond federal guidance. If employers provide short rest breaks of around 20 minutes, they are generally compensable under the FLSA. Sector-specific rules or collective bargaining agreements can change requirements.
Final pay and pay frequency
Maine law requires employers to pay wages at regular intervals, with pay periods not exceeding statutory limits, and final wages must be paid by the next regular payday or within the timeframe set by statute. Employers who fail to pay on time may face penalties, and statutory remedies exist. Consult Maine statutes (Title 26) and DOL guidance for precise timing rules and damage provisions.
State-mandated retirement
MERIT is a state-facilitated retirement savings program in Maine, created to ensure that private-sector employees who do not have access to a workplace retirement plan can save for retirement via a payroll-deduction Roth IRA.
Wage deductions and garnishments
Employers must comply with Maine wage payment statutes and federal garnishment rules. Voluntary deductions require proper written authorization, and court-ordered garnishments and child-support withholding must be handled following Maine procedures. See Maine Revenue Services and the Maine courts for forms and limits.
Recordkeeping and notices
Maintain required payroll, time and tax records per federal FLSA and Maine statutes. Post required Maine DOL workplace posters, including wage and hour, child labor, the EPL poster and PFML employer notices, where employees can see them.
Compliance updates
| Date | What changed |
|---|
| 2025 | PFML premium collection begins, with quarterly remittances. Employers must register and begin reporting wages for the PFML fund. Benefits are scheduled to begin May 1, 2026. |
| September 24, 2025 | LD 55 amendments to Earned Paid Leave (accrual and carryover changes) take effect. Employers should update policies and systems. |
Resources and references
- Maine Revenue Services - Individual Income Tax and rate schedules (2025), and the Individual Income Tax page.
- Maine Department of Labor - Unemployment and Employer Services, including the UI taxable wage base and employer guidance.
- Maine Paid Family and Medical Leave (PFML) - employer resources and FAQ, covering the program timeline, premium rates and portal reporting.
- Maine Department of Labor - Earned Paid Leave (EPL) guidance and the Maine statute at 26 M.R.S. §637.
- Maine Legislature - LD 55 (2025) text amending Earned Paid Leave, with statute changes effective September 24, 2025.
Frequently asked questions
What is Maine's unemployment insurance taxable wage base?
Employers pay Maine UI premiums on the first $12,000 of each employee's wages on a calendar year basis. Employer rates are experience-rated, and new-employer and initial rates are published by the Maine Department of Labor.
How much are Maine Paid Family and Medical Leave premiums?
For calendar years 2025 through 2027 the joint premium rate is set by employer size: employers with 15 or more employees generally pay 1% of wages and may deduct up to half from employees, while employers with fewer than 15 employees pay 0.5% and may deduct the full 0.5% from employees. No more than 0.5% may ever be deducted from an employee's wages.
When do Maine PFML contributions and benefits start?
Premium contributions started in 2025 with quarterly remittance through the Maine Paid Leave portal to build the PFML fund, and benefits are scheduled to begin May 1, 2026. Employers must register and submit quarterly wage reports and payments.
How should Maine PFML contributions appear on a W-2?
Employee premium contributions should be reported in Box 14 of the W-2 as 'MEPFML'.
How much earned paid leave do Maine employees accrue?
Under Maine's Earned Paid Leave law (26 M.R.S. section 637), covered employers must provide 1 hour of paid leave for every 40 hours worked, up to 40 hours per year. Accrual begins at the start of employment, and employers may impose a waiting period before use, subject to a statutory limit of 120 days.
