Maine Payroll Guide

Maine Payroll Tax Guide (2026)

Maine is the busiest New England payroll state in 2026. The minimum wage stepped up to $15.10 in January, paid family and medical leave benefits opened on May 1, and every unemployment rate carries two small assessments bolted on top of it.[2]

10 min read • Reviewed by Rajanikant Patel CPA • Verified • Sources: MRS, MDOL, IRS
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Quick Facts

Maine payroll at a glance

Maine employers handle three state payroll taxes: graduated income tax withholding, employer paid unemployment contributions with two add on assessments, and paid family and medical leave premiums shared with employees.[2]

State income tax withholding
5.80%–7.15% [1]
UI taxable wage base
$12,000 per employee [2]
New employer UI rate
2.54% [2]
Experienced UI rate range
0.00%–6.29% [2]
Paid Family and Medical Leave employee contribution, withheld from employee
0.50%, $184,500 [6]
Competitive Skills Scholarship Fund (CSSF)
0.14% [2]
Social Security wage base
$184,500 [2]
FUTA net rate
0.6% = $42 per employee [14]
State minimum wage
$15.10 per hour [8]
Local minimum wage ordinances
2 jurisdictions [8]
UI registration trigger
An employing unit becomes subject once it pays $1,500 or more in wages in… [2]
Exempt salary threshold
$45,300 per year [8]
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What changed for Maine payroll in 2026

Six items moved for Maine employers this year. Anything below is what have changed since the 2025 tables, so a rate card carried over from last year will be wrong in at least one place.

Minimum wage rises to $15.10 PFML benefits opened May 1 New employer UI rate 2.23% Exempt salary floor $45,300.32 Top UI rate now 6.29% Tip threshold now $191 a month
Two assessments ride on top of your unemployment rate: Maine employers often budget only the experience rate printed at the top of the rate notice. Every contributing employer also pays the Competitive Skills Scholarship Fund assessment and the Unemployment Program Administrative Fund assessment, which is why a published 2.23% new employer rate becomes a combined 2.54%. Reimbursable employers are exempt from both, but contributing employers are not.[2]
Estimate

2026 Maine payroll tax calculator

Enter one employee’s annual gross wages to see what the employer owes, what comes out of the paycheque, and the true cost of employment.

Maine · 2026 rates · per employee, per calendar year
Cash wages subject to payroll tax, before any withholding.
Your exact rate comes from Maine Department of Labor, Bureau of Unemployment Compensation each year.
FUTA is 6.0% less a 5.4% credit where the state has no outstanding federal loan.

Employer pays

UI, on first $12,000–
Competitive Skills Scholarship Fund (CSSF), on first $12,000–
Unemployment Program Administrative Fund (UPAF), on first $12,000–
Paid Family and Medical Leave employer share, on first $184,500–
FUTA, on first $7,000–
Social Security, 6.2%–
Medicare, 1.45%–
Employer payroll tax–

Withheld from the employee

Paid Family and Medical Leave employee contribution, 0.5%, to $184,500–
Social Security, 6.2%–
Medicare, 1.45%–
Additional Medicare, 0.9% over $200,000–
Withheld from employee–
True cost of employment–
Employer tax as % of wages–
Total payroll tax, both sides–

State income tax withholding is not included above: it depends on the employee’s Form W-4ME, Employee’s Maine Withholding Allowance Certificate and filing status, so it cannot be estimated from gross pay alone.

Rates & Nexus

Payroll tax rates & the nexus question

Maine runs 6 state payroll taxes. The table below is the whole state layer for 2026.[2]

The state payroll taxes

TaxPaid by2026 rateWage base
UIEmployer0.00%–6.29%; 2.54% new$12,000
Competitive Skills Scholarship Fund (CSSF)Employer0.14%$12,000
Unemployment Program Administrative Fund (UPAF)Employer0.17%$12,000
Paid Family and Medical Leave employer shareEmployer0.50%$184,500
Paid Family and Medical Leave employee contributionEmployee0.50%$184,500
Income tax withholdingEmployee5.80%–7.15%No limit

The 2026 experience rate array runs from category 1 at 0.00% to category 20 at 6.29%. Every contributing employer also pays the CSSF and UPAF assessments on top, which is why Maine publishes a combined 2026 new employer rate of 2.54%. The 2.54% combined new employer rate is 2.23% UI plus 0.14% CSSF plus 0.17% UPAF. Form ME UC-1 instructions print UPAF at 0.16%, which does not reconcile; use 0.17%.[2]

Supplemental wages have their own rate. Bonuses, commissions and other supplemental payments are withheld at 5.00% when paid separately from regular wages. That is a state rate only; federal supplemental withholding is a separate 22% layer.[1]

Who has to register

An employing unit becomes subject once it pays $1,500 or more in wages in any calendar quarter in the current or preceding calendar year, or has one or more individuals in employment for some portion of a day in each of 20 different weeks in the current or preceding calendar year.[2] Income tax withholding is administered separately by Maine Revenue Services, so most employers end up with two state account numbers, not one.

Multistate and remote employees

When an employee works in more than one state, the four-part test below decides which state the wages are reported to. The tests run in order: you stop at the first one that gives an answer.

  • 1. Localisation of service→
  • 2. Base of operations→
  • 3. Place of direction & control→
  • 4. Employee’s residence

One remote employee is usually enough. A single person working from home in Maine generally creates an obligation to register and report wages here, even if the business has no office, property or customers in the state.

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Compliance

Registration & return filing

Registration is online and free. The unemployment account and, where one exists, the withholding account are opened separately and carry different numbers.[2]

How to register

  • Cross the wage threshold→
  • ReEmployME→
  • Receive account number→
  • File & deposit online

An employing unit becomes subject once it pays $1,500 or more in wages in any calendar quarter in the current or preceding calendar year, or has one or more individuals in employment for some portion of a day in each of 20 different weeks in the current or preceding calendar year.[2]

Deposit schedule

Employers whose total withholding in the lookback period of July 1, 2024 through June 30, 2025 was $18,000 or more must remit on a semiweekly schedule. All other employers remit quarterly with the return, and electronic payment is required once combined annual tax liability exceeds $10,000.[1]

Returns, reports & due dates

FormWhat it isDue
Form ME UC-1, Unemployment Contributions Quarterly ReportQuarterly unemployment returnApril 30, July 31, October 31, January 31
Form 941ME is filed each quarter, due the last day of the month following the end of…Income tax withholding returnsEmployers whose total withholding in the lookback period of July 1, 20
Annual reconciliationYear-end withholding reconciliationJanuary 31
Form 941Federal quarterly returnLast day of the month after quarter end
Form 940Federal unemployment, annualJanuary 31
New hire reportReport of newly hired employeesWithin 20 days of start date

Quarterly unemployment returns are due April 30, July 31, October 31, January 31. A return filed one day late is delinquent, and in most states the penalty attaches to the return, not the payment.[2]

Pricing

Payroll Pricing

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Setup fee
one-time onboarding
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Every payroll run
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$0
Off-cycle payroll
corrections & bonuses
billed
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$0
Year-end filings
W-2s, 1099s & more
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$0
All you actually pay
Per employee, per pay run
$6 /emp
Plus a flat $40 minimum per pay run. That’s the whole bill.
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Wage Base

Subject wages vs. exempt payments

Not every dollar an employee receives is a taxable wage. The split below governs what goes into the unemployment wage base and what is reported at year end.[2]

Subject wages

  • Salaries, hourly pay, overtime and piece rates
  • Commissions, bonuses and incentive pay
  • Most cash tips reported by the employee
  • Vacation, holiday and paid sick leave when taken as wages
  • Severance and payments in lieu of notice
  • The cash value of meals and lodging provided as compensation
  • Employer contributions to a non-qualified deferred compensation plan
  • Wages subject to the employee-paid contributions listed above

Not subject

  • Reimbursements of genuine business expenses under an accountable plan
  • Employer contributions to a qualified retirement plan
  • Employer-paid premiums for accident and health insurance
  • Most third-party sick pay after the sixth calendar month
  • Payments to a genuine independent contractor
  • Workers compensation benefits

The wage base is per employer, per year, not per job. If you hire someone in August who already earned $12,000 elsewhere, your unemployment clock still starts at zero. The one exception is a successor employer taking over an existing payroll, who inherits the wages already paid.

Reference

Glossary of key terms

Taxable wage base
The slice of each employee’s annual pay that unemployment tax is calculated on. In Maine that is $12,000 for 2026. Earnings above it are still wages, they are simply no longer taxed for unemployment.
Paid Family and Medical Leave employee contribution
An employee-funded contribution withheld from pay at 0.50%. It is the employee’s money, so it is withheld rather than paid by the employer, but the employer is responsible for remitting it.
Experience rating
The method Maine Department of Labor, Bureau of Unemployment Compensation uses to set each employer’s own unemployment rate from its history of claims. Employers with fewer charged claims move down the schedule; those with more move up.
New employer rate
The rate assigned before an employer has enough history to be experience rated. It normally applies for two to three years, then the account moves onto the experience schedule.
Form W-4ME, Employee’s Maine Withholding Allowance Certificate
The state withholding certificate. It sets how much income tax comes out of each cheque and is filed with the employer, not with Maine Revenue Services.
Reserve account
The running balance of contributions an employer has paid in, less the benefits charged against it. The ratio of that balance to taxable payroll is what drives the assigned rate.
Successor employer
A business that acquires another’s payroll may inherit both its experience rate and the wages already paid toward the wage base for the year. Getting this wrong is a common acquisition error.
Localisation of service
The first of four tests deciding which state a multistate employee’s wages are reported to. If substantially all the work is in one state, that state wins and the remaining tests are never reached.
FUTA credit reduction
A reduction in the 5.4% federal unemployment credit applied to states that have carried an outstanding federal loan for two or more consecutive Januaries. It raises the effective FUTA rate and is settled each November.
Supplemental wages
Bonuses, commissions, awards and similar payments made outside the regular payroll cycle. Many states set a separate flat withholding rate for them.
Federal, State & Local

Maine payroll tax, layer by layer

Federal tax applies everywhere and is the larger number. The state layer is what changes when you cross a border.

Layer 1: Federal

TaxRate2026 base
Social Security6.2% each side$184,500
Medicare1.45% each sideNo limit
Additional Medicare0.9% employee onlyOver $200,000
FUTA, standard0.6% net$7,000
Federal income taxPer Form W-4No limit

Maine has no FUTA credit reduction for 2026, so the standard 0.6% net rate applies, $42 per employee. The final list is not published until 10 November 2026.[14]

Layer 2: State

TaxRate2026 base
UI, new employer2.54%$12,000
UI, experienced0.00%–6.29%$12,000
Competitive Skills Scholarship Fund (CSSF)0.14%$12,000
Unemployment Program Administrative Fund (UPAF)0.17%$12,000
Paid Family and Medical Leave employer share0.50%$184,500
Paid Family and Medical Leave employee contribution, employee0.50%$184,500
Income tax, standard5.80%–7.15%No limit
Income tax, supplemental5.00%No limit

Layer 3, county & city: no payroll tax, but a wage floor

No county or city in Maine levies its own payroll or income tax withheld by employers. The local layer shows up as minimum wage, not as tax.[8]

The state minimum wage is $15.10 an hour, effective 2026-01-01. The tipped cash wage is $7.55. 2 local jurisdictions set a higher floor. Portland and Rockland have adopted their own minimum wage ordinances. Where a local rate is higher than the state rate, the higher local rate applies to work performed in that municipality. Maine’s minimum wage is adjusted every January 1 using the cost of living index for the Northeast region, so the next step takes effect January 1, 2027.[8]

Overtime exemption is a separate test. A salaried employee is exempt from overtime only above $45,300 a year ($871.16 a week) Maine state rule, and only if the duties test is also met. Paying a salary is not by itself enough.[8]

FAQ

Maine payroll FAQs

The total premium is 1% of wages for employers with 15 or more covered employees and 0.5% for employers with fewer than 15. Larger employers may deduct no more than half the premium from employees, so the employee share is capped at 0.5%. Smaller employers may deduct the full 0.5% from employees. The premium excludes wages above the annual Social Security limit.

Maine counts covered employees per federal employer identification number on the employer’s established payroll in 20 or more calendar weeks during the 12 month period preceding September 30 each year. An employer that reaches 15 or more in that window is treated as a large employer. That single test decides whether your total premium is 1% or 0.5%.

Contributions apply to the first $12,000 of each employee’s gross wages for the year. A 2026 new employer pays 2.23% plus the CSSF and UPAF assessments, a published combined rate of 2.54%, which is about $305 per employee at the full wage base. Experience rated employers range from 0.00% to 6.29% before the assessments are added.

Maine looks back at total withholding from July 1, 2024 through June 30, 2025. Employers at $18,000 or more in that lookback period must pay on a semiweekly schedule. Everyone else pays quarterly with Form 941ME, which is due the last day of the month after the quarter closes.

The service employee direct cash wage is $7.55 an hour, exactly half the 15.10 dollar minimum wage, so the maximum tip credit is the other $7.55. An employee must receive more than $191 a month in tips to be treated as a service employee. Direct wages plus tips must reach at least $15.10 an hour.

There is no local income tax anywhere in Maine, so state withholding is the only income tax deduction. Portland and Rockland do have their own minimum wage ordinances, and where a local rate exceeds the 15.10 dollar state rate the higher local rate applies to work performed there.

$12,000 per employee per calendar year. Once an employee reaches that in wages from you, no further unemployment tax is due on that employee for the rest of the year. The count restarts on 1 January and does not carry over from a previous employer.

$15.10 an hour. 2 local jurisdictions set a higher rate, so check the rate for the location where the employee actually works. The tipped cash wage is $7.55.

April 30, July 31, October 31, January 31. A return is delinquent the day after the deadline even if the tax itself was paid on time, so file the return whether or not you can pay.

Verification

Sources & methodology

  1. Maine Revenue Services – Withholding Tables for Individual Income Tax, 2026 (instructions and formulas)
  2. Maine Department of Labor, Bureau of Unemployment Compensation – 2026 Unemployment Contribution Rates and Experience Rate Array
  3. Maine Department of Labor – Unemployment Contributions Quarterly Report (Form ME UC-1) Instructions, 2026
  4. Maine Department of Labor – Unemployment Insurance information for employers
  5. Maine Paid Leave, Maine Department of Labor – Paid Family and Medical Leave employer information
  6. Maine Paid Leave, Maine Department of Labor – Paid Family and Medical Leave employer frequently asked questions, June 2026
  7. Maine Paid Leave, Maine Department of Labor – Paid Family and Medical Leave employer frequently asked questions, July 2026
  8. Maine Department of Labor – Maine’s Minimum Wage $15.10 Per Hour Beginning January 1, 2026
  9. Maine Department of Labor – Maine Paid Family and Medical Leave Applications Open
  10. Maine Department of Labor, Bureau of Labor Standards – Minimum Wage Frequently Asked Questions
  11. Maine State Legislature – Maine Revised Statutes Title 26, Section 1043, Definitions
  12. U.S. Department of Labor, Employment and Training Administration – Significant Provisions of State Unemployment Insurance Laws, January 2026
  13. U.S. Department of Labor, Employment and Training Administration – Significant Provisions of State Unemployment Insurance Laws, January 2025
  14. U.S. Department of Labor, Employment and Training Administration – FUTA Credit Reductions
Methodology: every rate, threshold and due date on this page was taken from the administering agency’s own published material for the 2026 tax year, checked on Oct 1, 2026. Where a federal figure applies it comes from the IRS, SSA or US Department of Labor. 4 data points on this page could not be confirmed against a primary source and are either omitted or marked as not published, rather than estimated. Rates change, and some change mid-year, so confirm against your own rate notice before running a payroll.
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