Minnesota keeps Paid Leave payroll tax at 0.88% for 2027
On Friday, July 31, 2026, the Minnesota Department of Employment and Economic Development set the 2027 Minnesota Paid Leave premium at 0.88% of covered wages, unchanged from 2026.[1]
Employers may collect up to half of that premium — 0.44% of wages — from employees, though they may choose to pay a larger share themselves.[1] DEED's actuarial review found 2026 premium collections are broadly in line with benefits paid and projects the fund will remain sustainable through 2027 without a rate increase.[1] More than 75,000 Minnesotans have used Paid Leave in 2026, and the program has paid out over $600 million in benefits so far.[1]
The Paid Leave benefit design allows up to 12 weeks each of family or medical leave, with a 20-week maximum combined, and partial wage replacement is capped at the state average weekly wage of about $1,423.[1] Minnesotareformer also reported DEED's announcement that the premium rate will stay the same next year.[2]
For employers and workers, the unchanged rate means payroll costs tied directly to the Paid Leave premium will not rise in 2027 unless DEED revises the projection later.[1]
Show source details & analysis (2 sources)
📌 Key Facts
- On Friday, July 31, 2026, the Minnesota Department of Employment and Economic Development (DEED) confirmed it set the 2027 Minnesota Paid Leave premium rate at 0.88% of covered wages, unchanged from 2026.
- Employers may collect up to half of that premium (0.44%) from employees, or choose to pay a larger share themselves.
- DEED’s actuarial analysis shows 2026 premium collections are broadly in line with benefits paid and projects the Paid Leave fund will remain sustainable through 2027 without a rate hike.
- More than 75,000 Minnesotans have used Paid Leave in 2026, with over $600 million in benefits paid so far.
- Partial wage replacement capped at the state average weekly wage (about $1,423) is part of the benefit design, which allows up to 12 weeks each of family or medical leave (20 weeks maximum combined).
📰 Source Timeline (2)
Follow how coverage of this story developed over time
- Confirms DEED has set the 2027 Minnesota Paid Leave premium rate at 0.88% of covered wages, unchanged from 2026.
- Specifies employers may collect up to half the premium (0.44%) from employees, or choose to pay a larger share themselves.
- States that more than 75,000 Minnesotans have already used Paid Leave in 2026, with over $600 million in benefits paid so far.
- Notes DEED’s actuarial analysis shows premium collections in 2026 are broadly in line with benefits paid, and the fund is projected to remain sustainable through 2027 without a rate hike.
- Clarifies benefit design details: up to 12 weeks each of family or medical leave (maximum 20 combined), partial wage replacement capped at the state average weekly wage (about $1,423).