New Mass. Payroll Tax to Fund Paid Leave Takes Effect

The new tax aims to fund paid medical and family leave

A new payroll tax to fund paid medical and family leave in Massachusetts went into effect Tuesday.

Passed last year, the Paid Family and Medical Leave act allows employees to take up to 26 weeks of paid leave for medical or family reasons, such as bonding with a new child; managing family when a member is on active duty or serious health concerns.

The maximum amount taken from an individual’s paycheck will be 38 cents for every $100 earned.

A full-time minimum wage employee making $25,000 a year will be charged no more than $1.82 a week, contributing $95 a year. Meanwhile, an employee making $100,000 a year will contribute a maximum of $7.27 weekly and pay $378 annually.

W-2 employees are covered by the new act, whether they work full-time, part-time or seasonally. Self-employed individuals are also covered and can choose not to contribute.

Most of the benefits will take effect on Jan. 1, 2021. In July of that year, benefits will be available to individuals who need to care for a family member with a serious health condition. The amount a person will receive as part of the benefits will depend on their earnings and will be capped at $850 a week.

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