Massachusetts employers must handle several payroll tax obligations: flat 5% (+ 4% surtax on income over $1M) state income tax withholding, SUI contributions (0.94%–14.37% on the first $15,000 per employee), plus all federal payroll taxes (FICA at 7.65%, FUTA at 0.6% on the first $7,000). New employers pay an SUI rate of 2.42%.
Table of Contents
Overview: Massachusetts Payroll Tax Landscape
Running payroll in Massachusetts means managing both state and federal tax obligations. Here is the complete picture of what Massachusetts employers owe:
| Tax | Who Pays | Rate | Wage Base |
|---|---|---|---|
| Massachusetts Income Tax | Employee (employer withholds) | flat 5% (+ 4% surtax on income over $1M) | All wages |
| Massachusetts SUI | Employer | 0.94%–14.37% | $15,000 |
| Social Security (FICA) | Split 50/50 | 6.2% each | $176,100 |
| Medicare (FICA) | Split 50/50 | 1.45% each | No limit |
| FUTA | Employer | 0.6% (after credit) | $7,000 |
State Income Tax: flat 5% (+ 4% surtax on income over $1M)
Massachusetts has a flat 5% income tax rate for most taxpayers, plus a 4% surtax on income exceeding $1 million (the ‘millionaire tax’), creating an effective 9% top rate for high earners.
As an employer, you are responsible for withholding Massachusetts state income tax from every employee’s paycheck based on the withholding tables published by the Massachusetts Department of Revenue. You must remit these withholdings on the schedule assigned by the state — typically monthly or quarterly depending on your total tax liability.
For details, visit the Massachusetts Department of Revenue website.
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State Unemployment Insurance (SUI)
Massachusetts SUI is an employer-paid tax on the first $15,000 of each employee’s wages per year. New employers pay 2.42%. Experienced employers are rated between 0.94%–14.37% based on their claims history.
SUI is administered by the Massachusetts Executive Office of Labor and Workforce Development. You must register for an SUI account when you hire your first employee and file quarterly wage reports.
For a detailed breakdown, see our Massachusetts SUI Rates 2026 guide.
Federal Payroll Taxes
On top of Massachusetts state obligations, every employer must handle federal payroll taxes:
- FICA (Social Security + Medicare): 7.65% employer share, 7.65% employee share. Social Security applies to the first $176,100; Medicare has no cap.
- FUTA: 0.6% employer-only tax on the first $7,000 per employee (after state SUI credit).
- Federal Income Tax Withholding: Based on employee W-4 and IRS tables. Employer withholds but does not pay.
For a complete breakdown, see our Federal Payroll Tax Basics guide.
Filing Schedules and Deadlines
Key deadlines for Massachusetts employers:
- Federal 941: Quarterly — due by the last day of the month after each quarter
- Federal 940 (FUTA): Annual — due January 31
- Massachusetts SUI: Quarterly wage reports — due by the last day of the month after each quarter
- Massachusetts Income Tax Withholding: Monthly or quarterly, based on your liability
- W-2s: Due to employees by January 31, filed with SSA by January 31
Penalties for Late Filing and Payment
Late or missed payroll tax payments result in penalties at both the federal and state level:
- IRS: Failure-to-deposit penalties range from 2% to 15% depending on how late
- Massachusetts: State penalties vary but typically include interest on unpaid balances plus fixed or percentage-based penalty fees
- Trust fund penalty: The IRS can hold business owners personally liable for unpaid withholding taxes (the “Trust Fund Recovery Penalty”)
Frequently Asked Questions
What payroll taxes do Massachusetts employers pay?
Massachusetts employers pay federal payroll taxes (FICA, FUTA) and state unemployment insurance (SUI) on the first $15,000 of wages per employee. Employers also withhold Massachusetts state income tax (flat 5% (+ 4% surtax on income over $1M)) from employee paychecks.
What is the Massachusetts SUI wage base for 2026?
The Massachusetts SUI wage base for 2026 is $15,000. Employers pay SUI on the first $15,000 of each employee's wages per year.
What is the new employer SUI rate in Massachusetts?
New employers in Massachusetts typically pay an SUI rate of 2.42%. Experienced employer rates range from 0.94%–14.37% based on claims history.
When are Massachusetts payroll taxes due?
Massachusetts SUI taxes are typically filed quarterly. State income tax withholding is remitted on the schedule assigned by the Massachusetts Department of Revenue — monthly or quarterly based on liability. Check with the Massachusetts Department of Revenue for current due dates.
Does Massachusetts have local payroll taxes?
Some Massachusetts municipalities may impose local taxes. Check with local authorities for specific requirements.
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Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of February 2026 and may not reflect recent changes in federal or Massachusetts state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with Massachusetts law before making payroll or compliance decisions for your business.