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MA PFML 2027: Nothing Moved Except the Label

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The Department of Family and Medical Leave published the 2027 contribution rates on 1 October 2026, and the headline is easy to miss because it is a non-event: for an employer with 25 or more covered individuals the total stays at 0.88% of eligible wages, the employee share stays at 0.46% and the employer share stays at 0.42% (Massachusetts DFML, updated 1 October 2026, retrieved 2026-10-02).

Nobody’s paycheque changes. Nobody’s employer cost changes. What changes is which of the two buckets the employer’s money goes into — and that re-coding has to happen in payroll before the first January run, for a reason that has nothing to do with the amount.

Key Takeaways

  • The 2027 total is 0.88%, unchanged. Employers with fewer than 25 covered individuals stay at 0.46% with no employer share.
  • The employee share stays at 0.46% and the employer share stays at 0.42% across both years. The split between the two sides does not move.
  • What moves is the bucket: in 2027 the employer’s 0.42% funds family leave rather than medical leave.
  • Medical leave in 2027 is up to 100% employee-funded at 0.18%; family leave is 0.28% employee and 0.42% employer.
  • The reason is tax, not cost — employer-funded medical leave benefits were the part IRS guidance made taxable as wages.

The numbers that did not change

This is the chart worth keeping, because it is the one that stops a conversation about a rate rise that did not happen:

PFML contribution shares, 2026 against 2027 For employers with 25 or more covered individuals, the employee share is 0.46 percent of eligible wages in both 2026 and 2027, and the employer share is 0.42 percent in both years. Neither figure changes. Who pays what, 25+ covered individuals Percent of eligible wages. Both years identical. 2026, employee 0.46% 2026, employer 0.42% 2027, employee 0.46% 2027, employer 0.42%
Source: Massachusetts Department of Family and Medical Leave, employer contribution rates, updated 1 October 2026.

Four bars, two distinct lengths, no movement between the years. If a payroll provider or an adviser tells you PFML is going up in January, this is the page to check it against.

What actually moves

The composition inside those totals is what Chapter 101 of the Acts of 2026 rearranged. For an employer with 25 or more covered individuals:

2026. Family leave is 0.18%, up to 100% of which can be withheld from the employee. Medical leave is 0.70%, of which up to 0.28% can be withheld from the employee and the employer must contribute the remaining 0.42%.

2027. Family leave is 0.70%, of which up to 0.28% can be withheld from the employee and the employer contributes the remaining 0.42%. Medical leave is 0.18%, up to 100% of which can be withheld from the employee.

The employer’s 0.42% has moved from the medical column to the family column. Everything else is arithmetic that lands in the same place.

For employers with fewer than 25 covered individuals, 2027 is an effective 0.46% and there is still no employer share at all — small employers are not required to pay the employer portion of the medical leave contribution, and that does not change.

The reason is the tax treatment, not the money

Why rearrange something that nets to the same figure?

Because IRS Revenue Ruling 2025-4 held that medical leave benefits attributable to employer contributions are taxable wages. The exposure was created by the existence of an employer contribution to medical leave, not by its size.

Chapter 101, signed on 12 June 2026, removes employer contributions from medical leave entirely. With no employer contribution funding medical leave, there is no employer-attributable portion of a medical leave benefit to tax as wages. The money still gets collected — it just gets collected against family leave instead, where the tax question does not arise in the same way.

That is why the 2027 change is a payroll-configuration job rather than a budget item. We wrote up the 2026 position, including the 60% taxable share for employers with 25 or more employees and why Massachusetts PFML earns no federal credit, in the earlier note on what did and did not change this year.

What to do before the first January payroll

  1. Do not change the amounts. Employee 0.46%, employer 0.42%, same as now.
  2. Change which contribution type the employer portion is coded to — family leave from 1 January 2027, not medical.
  3. Check your provider has done it rather than assuming. The totals being identical is exactly what makes a missed re-code invisible on a payroll report.
  4. If you are under 25 covered individuals, confirm you are still sending 0.46% with no employer share, and that nothing has been “helpfully” added.
  5. Count your covered individuals before January. Crossing 25 is what changes your obligation, and a business that grew through 2026 may cross it without anyone noticing.

Point 5 is the one that catches people. The threshold is about the workforce you actually have, and a restaurant or salon that added staff over a busy year can arrive in January on the other side of it. Payroll setup is where that gets caught before it becomes a correction.

How this was checked

Every rate above comes from the DFML employer contribution rates page, which carries a last-updated stamp of 1 October 2026 and publishes the 2026 and 2027 splits side by side. The Chapter 101 description and its stated purpose — mitigating the impact of IRS guidance on the tax treatment of PFML benefits — are from the same page.

The 2026 figures are included so the comparison can be checked rather than taken on trust. Both years are on one page; this article did not reconstruct one of them from memory.

Green Books Inc. is a bookkeeping practice — Certified Bookkeeper (CPB), IRS Authorized e-File Agent, and Notary Public. This is general information about published rules, not tax advice. DFML sets rates annually, so figures stated here are for 2026 and 2027 only.

Frequently asked questions

Our provider says PFML is increasing in January. Are they wrong?

On the total, yes — 0.88% in 2026 and 0.88% in 2027 for employers with 25 or more covered individuals. They may be describing the family leave contribution, which does rise from 0.18% to 0.70%. That is true and it is not an increase in what anyone pays, because the medical contribution falls by the same amount.

Will employees see anything different on their pay stub?

The total withheld should be the same 0.46%. If the stub itemises family and medical separately, those two lines will swap sizes. Worth mentioning before January rather than answering in February.

We have 24 employees and are about to hire two more. What happens?

Crossing 25 covered individuals brings the employer share of the medical leave contribution into play — in 2027 terms, the employer’s 0.42% on family leave. Check the count against DFML’s definition of a covered individual, which is not identical to a headcount of W-2 employees.

Does this change the taxability of benefits our employees receive?

That is the point of the change, and it is why it is worth doing correctly. With no employer contribution funding medical leave from 2027, the employer-attributable portion that IRS guidance made taxable is no longer being created.

One line in the payroll settings

This is a small job with a quiet failure mode. The amounts match, the reports reconcile, and the only thing wrong is which bucket the employer’s money landed in.

If you would like the 2027 configuration checked before the first January run — or you are not sure whether you are over or under the 25-employee line — book a consultation.