Minnesota payroll taxes
Every tax withheld from a Minnesota paycheck or paid by the employer in 2026, with rates and wage limits.
Last verified November 2, 2026. Sources: mn.gov, taxfoundation.org, payroll.org, content.govdelivery.com.
| Tax | Employee pays | Employer pays | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $184,500 |
| Medicare | 1.45%* | 1.45% | No limit |
| FUTA | — | 0.6% | $7,000 |
| Minnesota SUTA | — | 1.4% (new) | $44,000 |
| Minnesota Paid Leave | 0.44% | 0.44% | $185,000 |
| Minnesota income tax | 5.35%–9.85% | — | — |
*Plus 0.9% Additional Medicare Tax withheld on wages over $200,000. FUTA rate shown is net of the state credit.
State unemployment insurance
Minnesota charges new employers 1.4% on the first $44,000 each employee earns in a year. After a few years, the rate is based on the employer's layoff history and ranges from 0.5% to 9.4%. New employer rates are industry-based (51 rates, 1.00%-8.90%). 1.00% applies to many non-construction industries, plus the 0.4% base rate, giving the 1.4% used here. It is unclear whether the published industry rates already include the base rate.
Base tax rate 0.4% (included). Workforce Development (Enhancement) Fee is about 0.1% (not included). An additional assessment may apply. Paid Leave starts in 2026 at 0.88%, split between employer and employee (separate program).
Register and file with the Minnesota unemployment tax agency.
Paid leave and disability programs
- Minnesota Paid Leave: employees pay 0.44%, employers pay 0.44% on wages up to $185,000 (maximum $814.00 a year). Contributions began Jan 1, 2026. Total 0.88%; employer pays at least 50%, may deduct up to 0.44% from employee. Small employers (30 or fewer employees) pay reduced total 0.66% (employer share ~0.22%). Wage base $185,000 (SS base rounded). 2027 rate unchanged at 0.88%.
Income tax withholding
Minnesota has a graduated income tax with 4 brackets, from 5.35% up to 9.85% on taxable income over $203,150 for single filers.
Frequently asked questions
- What payroll taxes do employers pay in Minnesota?
- Social Security, Medicare, federal unemployment (FUTA) and Minnesota unemployment insurance (SUTA), plus Minnesota Paid Leave.
- What is the Minnesota SUTA wage base for 2026?
- $44,000 per employee.
- Does Minnesota require state income tax withholding?
- Yes. Employers withhold Minnesota income tax based on the employee's state withholding certificate or federal W-4.