Maryland FAMLI for small employers: your 2027 checklist

Maryland FAMLI payroll contributions start Jan. 1, 2027. Rates, the under-15 employee rule, key dates and a step-by-step checklist for small employers.

Published Nov 8, 2026 · 7 min read · By Catervas team

Tags: maryland, payroll, compliance

Starting with paychecks in January 2027, Maryland employers have a new line on payroll: FAMLI. If you have even one employee working in Maryland, it applies to you. This guide covers what it is, what it costs a small business, the dates you need to know, and a checklist you can work through before the first paycheck of 2027.

Last checked: November 2026.

What FAMLI is

FAMLI stands for Family and Medical Leave Insurance. It is a state insurance fund run by the Maryland Department of Labor. Starting January 1, 2028, eligible employees can take up to 12 weeks of paid, job-protected leave, paid up to $1,000 a week (Maryland FAMLI). Covered reasons include a new child, a serious health condition, caring for a family member, and family needs tied to a military deployment (About the program).

Workers become eligible after working at least 680 hours in a Maryland job in the 4 calendar quarters before they file or their leave starts (About the program).

While an employee is on FAMLI leave, you must hold their job (the same or an equivalent one) and keep their health benefits going (For employers).

The current timeline (the dates moved)

FAMLI was created by the Time to Care Act in 2022 (Law and regulations). The start dates have been pushed back more than once, so older articles may show the wrong dates. In February 2025 the Department of Labor proposed another delay (MD Labor press release). Then House Bill 102 (Chapter 363 of 2025), approved by the Governor on May 6, 2025, moved the start of contributions from July 1, 2025 to January 1, 2027. It also said benefits must start no later than January 3, 2028, on a date the Secretary of Labor picks (Chapter 363 of 2025).

The Department now lists these official dates (About the program, Make contributions, For employers):

When	What happens
Now	Employer registration is open at paidleave.maryland.gov
One pay period before deductions start	Give employees written notice about withholding
January 1, 2027	Contributions start on wages paid from this date
April 30, 2027	First quarterly wage report and payment due (January to March wages)
July 2027	Notice to employees, six months before benefits start
November 2027	The state announces the 2028 rate
January 1, 2028	Employees can start getting benefits

After the first payment, reports and payments are due every quarter: April 30, July 31, October 31 and January 31 (Make contributions).

Who has to take part

Employers. If you have at least one employee in Maryland, you must register. State law has no exceptions (For employers).
Employees. Everyone whose job is based ("localized") in Maryland takes part. Part-time and seasonal workers count. Employees cannot opt out (Make contributions, Contributions FAQ). A simple test from the state: if you pay Maryland unemployment insurance for a worker, that worker is covered (About the program).
Solo owners. If you are the owner and the only employee, including of an S corporation, you are not treated as an employer and don't have to register (For employers).
1099 workers. FAMLI uses the same "ABC test" as unemployment insurance. Many 1099 workers will not count as employees, but some will (Contributions FAQ). Independent contractors don't count toward your employer size (Make contributions).

Rates and the small-employer rule

For wages paid from January 1 to December 31, 2027, the total rate is 0.9% of wages, up to the Social Security wage cap. It is split evenly: 0.45% from the employer and 0.45% from the employee. By law, the total rate can't go above 1.2% (Make contributions).

If you have fewer than 15 employees, you only send in the employee half (0.45%), and you may take that amount out of employee pay. The state calls this the "small employer discount" (Make contributions, Small employer guidance). The state says more than 80% of Maryland employers will qualify (Registration press release).

How the state counts your size (Make contributions):

It counts all employees under your federal EIN, inside and outside Maryland.
In 2027, size is checked each quarter. Under 15 for the quarter means the lower rate for that quarter.
From 2028, the state averages the last 4 quarters. An average under 15 means the lower rate for the whole next year.

You can also choose to pay some or all of the employee share yourself. The state says this may have tax effects, so ask your tax preparer first (Make contributions).

What it costs: a quick example

The state's own example: for an employee earning $50,000 a year, you could withhold up to $225 a year ($50,000 x 0.0045) (Contributions FAQ). If you pay every two weeks, that is about $8.65 a paycheck.

Under 15 employees: that $225 is the full amount due for that worker, and it can come from their pay.
15 or more employees: you add your own $225, for $450 total.

To estimate your own total, add up the gross wages you expect to pay Maryland employees in 2027. Multiply by 0.0045 for the employee share. If you have 15 or more employees, multiply by 0.009 for the full amount.

Your readiness checklist

Count your employees under your EIN, in every state. Write down whether you are under 15.
Pick who registers. The first registration must be done by an Authorized Officer. They'll sign in with Login.gov and need your EIN, plus their Social Security number and a driver's license or state ID to verify identity (Register).
Register at paidleave.maryland.gov. The state asks employers to register as soon as possible (Registration press release).
Choose a plan. You can use the State Plan or apply for a private plan (Registration press release). With an approved private plan you still file quarterly wage and hour reports (For employers).
Decide who pays the employee share: withhold it, or cover some or all of it yourself.
Set up payroll (see the next section) so deductions start with wages paid on January 1, 2027.
Send the notice at least one pay period before deductions start. The state has a 2026 Required Employee Notice Template in Word (For employers). Give it to new hires too.
Check the first 2027 paystub against the state's sample paystub.
Plan for tipped staff. Deductions must happen in the regular pay cycle. If a paycheck is too small to cover the deduction, you have up to six pay periods to collect it (Make contributions).
Put the due dates on your calendar: April 30, July 31, October 31 and January 31.
Update your handbook to cover job protection and keeping health benefits during leave. Plan the July 2027 notice and a yearly notice (For employers).
Watch for the 2028 rate in November 2027.

Where payroll software helps

The state expects payroll companies to update their systems for FAMLI (Make contributions). Still, don't assume it is switched on. Ask your provider three questions: Does it handle Maryland FAMLI? Does it apply the small-employer rate? Does it file the quarterly report and payment, or only withhold?

One example we checked: QuickBooks has a help article on setting up FAMLI in QuickBooks Online Payroll and QuickBooks Desktop Payroll. It covers splitting the rate between the company and employee portions if you cover part of the employee share, and entering 0% for both if you have an approved private plan (QuickBooks help).

If a CPA or payroll company runs payroll for you, they can't register for you. After you register, they can invite you to sign a Power of Attorney so they can file reports and send payments for you (For employers).

Two more details. Payments go through the FAMLI website, not BEACON, Maryland's unemployment insurance site. Reports use gross wages (Contributions FAQ).

This post is general information, not legal or tax advice. For your own case, call FAMLI Customer Care at (410) 525-4010 or email paid.leave@maryland.gov, Monday to Friday, 8 AM to 4 PM (Register).

Need a hand?

If you want help choosing or setting up payroll or other software for this, book a free call with Catervas. For free one-on-one business advice, the Maryland SBDC is a good place to start.