Minnesota Paid Family and Medical Leave: 0.88% Premium, Small Employer Rate and Deadlines

Minnesota's paid family and medical leave program is funded by a payroll premium that employers have been paying since January 1, 2026. Many owners search for it as Minnesota paid family leave. If you have employees in the state, you need three numbers before your next payroll run: the premium rate, the share you may pass on to workers, and the reduced rate some small employers qualify for. This guide covers each one, the deadlines that have passed or are coming up, and the points you should confirm with the state.

Disclaimer: This article is informational only. It is not legal, tax or payroll advice. Confirm current requirements with the Minnesota Department of Employment and Economic Development (DEED), and consult a qualified attorney or CPA for complex situations.

The short answer

Item	Figure
Premium rate, 2026	0.88 percent of covered wages
Premium rate, 2027	0.88 percent, held steady (DEED release, July 31, 2026)
Statutory ceiling on the rate	1.1 percent
Standard rate: employer share	At least 50 percent of the premium
Standard rate: maximum employee share	0.44 percent
Small employer rate	0.66 percent (75 percent of the standard rate)
Small employer rate: employer share	At least 0.22 percent (25 percent of the standard rate)
Small employer rate: employee share	The remaining 0.44 percent
First premium payment due	April 30, 2026

What the program is and when premiums started

Minnesota's paid leave program pays benefits to eligible workers for qualifying family and medical leave. It is paid for by premiums collected from covered wages, not by a flat fee or a separate business license. Premiums began on January 1, 2026. Employers report and pay them quarterly through the joint unemployment insurance (UI) and Paid Leave employer system, which DEED operates.

Premium collection is a payroll obligation, so it belongs in the same process as your withholding and state unemployment reporting. Owners who run payroll in-house or through a provider should confirm that the provider is set up to calculate the premium at the correct rate, including the small employer rate where it applies.

The 0.88 percent rate and how the split works

The premium rate for 2026 is 0.88 percent of covered wages. DEED has announced that the rate stays at 0.88 percent for 2027. Statute sets a ceiling of 1.1 percent, so the rate can rise above 0.88 percent only if the rate-setting process changes it, and any change should be confirmed with DEED before you budget for it.

Under the standard rate, the employer must pay at least 50 percent of the premium. The employer may collect up to 0.44 percent from employees, which is half of the 0.88 percent rate. An employer can absorb more than the minimum share, but it cannot take more than the rules allow from workers.

Here is an example using $1,000 of covered wages at the standard rate:

• Total premium: $1,000 x 0.88 percent = $8.80
• Employer share (minimum at 50 percent): $4.40
• Maximum employee share: $4.40

Your covered wages may not equal your gross pay. Confirm with DEED which wages are covered before you build your payroll formula, because an error in the base will carry into every quarterly payment.

The small employer rate: who qualifies

Minn. Stat. 268B.14, subd. 5a sets a lower rate for eligible small employers. An employer qualifies if it meets both of these tests:

• It has 30 or fewer employees.
• Its average wage is at or below 150 percent of the state average wage.

An eligible small employer pays 75 percent of the standard rate, which is 0.66 percent at the 2026 rate. The employer must pay at least 25 percent of the standard rate, which is 0.22 percent. The employees pay the rest, which is 0.44 percent.

Using the same $1,000 example at the small employer rate:

• Total premium: $1,000 x 0.66 percent = $6.60
• Employer share (minimum): $1,000 x 0.22 percent = $2.20
• Employee share: $4.40

The state's current average wage figure changes over time, so confirm with DEED how it counts employees for the 30 employee test and how it measures average wage before you rely on the small employer rate. If you qualify only in some quarters, ask DEED how the status is determined and how a change in headcount or wages is handled.

The statute says 0.7 percent for 2026: which number governs

You may see a printed figure of 0.7 percent for 2026 in the statute text. That printed figure does not control your payroll. The commissioner's adjusted rate governs, and that rate is 0.88 percent. Use 0.88 percent for 2026 and 0.88 percent for 2027 unless DEED publishes a different figure.

This is a common source of error for owners who work from an older PDF or a copy of the statute. Check the DEED announcement and the employer system instructions before you set up or correct a payroll rate.

Deadlines to track

These are the key dates. Mark them on your payroll calendar now.

1. January 1, 2026: Premiums begin.
2. April 30, 2026: The first premium payment is due.
3. July 31, 2026: DEED releases the 2027 rate, held at 0.88 percent.
4. Each quarter after April 30, 2026: Premiums are paid quarterly through the joint UI and Paid Leave employer system. Confirm the due date of each later quarterly payment in the employer system or with DEED.

If you missed the April 30, 2026 payment or any later one, contact DEED promptly rather than waiting for the next quarter. Ask how to correct the account and whether any penalty or interest applies. Do not assume a penalty figure.

How to report and pay

Premiums are reported and paid through the joint UI and Paid Leave employer system. Follow these steps:

1. Check whether your business already has an employer account with DEED for unemployment insurance. The joint system may use the same account.
2. Confirm which rate applies to your business: the standard rate or the small employer rate.
3. Calculate each quarter's covered wages for every employee and apply the rate.
4. Withhold the employee share, which may not exceed 0.44 percent under the standard rate or the amount set for the small employer rate.
5. Report and pay the full premium by the quarterly due date.

Keep your quarterly calculations and the employer system confirmations with your payroll records. If DEED asks for documentation later, you will need to show how the rate and the employee share were calculated.

Common mistakes

• Withholding too much from workers. Under the standard rate, the employee share may not exceed 0.44 percent. Check every pay period, not just the first one.
• Using the printed 0.7 percent figure. The commissioner's adjusted rate of 0.88 percent governs.
• Missing the small employer rate. If you meet both tests, the reduced rate may apply. Confirm your status with DEED instead of assuming you do or do not qualify.
• Paying less than the employer minimum. On the standard rate, the employer pays at least 50 percent. On the small employer rate, the employer pays at least 25 percent of the standard rate, or 0.22 percent.
• Treating a provider's default setting as correct. Payroll software may not update its rate tables on time. Compare its setting with the DEED announcement.

What to confirm with DEED

The premium rules are only one part of the program. Confirm the following directly with DEED before you make decisions that depend on them:

• Benefit amounts and the length of leave an eligible worker may take.
• Which workers are eligible for benefits, and the waiting period, if any, before benefits begin.
• How employers should handle job protection and returning employees.
• How to count employees for the 30 employee test and how the state average wage is measured for the small employer rate.
• The exact due date of each quarterly payment after April 30, 2026.

Search for Minnesota paid leave on the DEED website, or call DEED's program staff. Keep the name of the person you spoke with and the date, and save any written answer in your payroll file.

Resources

• Minnesota Department of Employment and Economic Development (DEED): Administers the paid leave program and the joint UI and Paid Leave employer system. Search for Minnesota paid leave on the DEED site for the current announcements and employer instructions.
• Minn. Stat. Chapter 268B: The statute that creates the program. Read the current text on the Office of the Revisor of Statutes site, and check DEED for the commissioner's adjusted rate, because the printed statute figure for 2026 differs.
• Minnesota Small Business Development Center Network: Administered by DEED, this network offers free or low-cost business advising that can help with payroll setup and recordkeeping. Details are at mn.gov/deed/business/help/sbdc/.

When to get professional help

A CPA can model the cost of the premium against your payroll and help you decide whether your business meets the small employer tests. An employment attorney can review your leave policies and handbook so they match the program's rules. A payroll provider can handle quarterly calculations, but you remain responsible for confirming the rate, the employee share and the deadlines. Ask any provider to show you the rate it applies and the source of that rate.

This article is informational only and is not legal or tax advice. Program rules, rates and deadlines can change. Confirm current figures with DEED and consult a qualified attorney or CPA before acting on any of them.