Minnesota Paid Leave Premium Rate Remains Unchanged for 2027
Beth Kerstein
Minnesota employers received welcome news on July 31, 2026. The Minnesota Department of Employment and Economic Development (DEED) announced that the Minnesota Paid Leave premium rate will remain at 0.88% of taxable wages for 2027, the same rate in effect for 2026. Qualifying small employers will also continue to receive a reduced premium rate of 0.66%.
State law requires DEED to review the financial health of the Paid Leave program each year and announce the premium rate for the following calendar year by July 31. Although the Commissioner has authority to adjust the rate annually, the program's first-year experience supported maintaining the current rates. By law, the premium rate cannot exceed 1.1% of taxable wages.
What Employers Should Know
- Standard employer premium rate (2027): 0.88% of taxable wages (no change from 2026).
- Qualifying small employer premium rate (2027): 0.66% of taxable wages (no change from 2026). To qualify, an employer must have 30 or fewer employees and an average employee wage of less than 150% of the statewide average annual wage.
- Employers may continue to deduct up to 0.44% from employee wages, with employees paying no more than one-half of the standard premium. Employers may choose to pay a greater share of the premium. Qualifying small employers benefit from the reduced employer contribution while the employee contribution remains unchanged.
- Employers should continue budgeting for Paid Leave contributions and monitor future annual announcements, as premium rates will continue to be reviewed each year.
The decision to maintain both the standard and small employer premium rates provides employers with cost certainty as Minnesota's Paid Leave program continues into its second year, allowing organizations to better forecast payroll expenses while remaining compliant with the state's leave requirements.
If you have any questions or need assistance, contact us for guidance and support. MRA members can contact the MRA 24/7 HR Hotline at 866-744-6854 or email the Hotline at [email protected].
