Denver occupational privilege tax

Two halves, one $500 test

Employee portion

$5.75 a monthwithheld from pay

Employer portion

$4.00 a monthper taxable employee

Trigger

$500+ in the monthfor work in Denver

Owners and managers

$4.00 a monthregardless of earnings

Each month stands alone. An employee who earns $500 or more from you for Denver work in a month owes the $5.75 for that month, and you owe $4.00 on top. Fall under $500 in a month and neither is due for that month. Separately, the business pays $4.00 a month for each owner, partner or manager doing business in Denver, whatever they earn.

The rates and rules

What the OPT costs for a year

A $60,000 employee earns $5,000 a month, far over the $500 line, so the total is $117.00 a year, of which $48.00 is your cost. That is small next to Colorado's other payroll items for the same person: FAMLI at 0.88% splits into $264.00 from the employee and $264.00 from you, and new employers pay a 3.05% combined unemployment rate on the first $30,600 of wages. The Colorado payroll tax page has the full employer math, and the employee cost calculator totals it.

Part-time staff and the $500 line

The $500 test matters most for hourly and seasonal teams. Denver's 2026 minimum wage is $19.29 an hour, so a minimum-wage worker crosses $500 after about 26 hours in a month ($500 / $19.29 = 25.9 hours). A weekend-only employee can be in the tax one month and out of it the next.

The city lists the tax in monthly amounts, so track the test by calendar month, not by pay period. If you pay biweekly, some months have three paychecks; the tax is still $5.75 and $4.00 for that month, not three times over. Count only pay for work in Denver toward the $500: a technician who spends most of the month at a site in Aurora may not cross the line in Denver.

Registering and filing

You set up the OPT with the Denver Treasury Division, which handles the city's business taxes. The city page we read lists the monthly amounts but does not state the return frequency, so confirm the filing schedule and due dates when you register. Keep a monthly record of which employees crossed $500 in Denver; it is the basis of every return.

Common OPT mistakes

• Taxing by home address. A Denver resident who works for you entirely in Boulder does not trigger the OPT through you. The tax follows Denver work, not residence.
• Forgetting the employer half. Withholding $5.75 and stopping there leaves the $4.00 per employee unpaid.
• Missing owners and managers. The $4.00 a month applies to each owner, partner or manager doing business in Denver even if they take no wages.
• Remote staff who come into the city. A hybrid employee whose Denver days earn $500 or more in a month is in the tax for that month.
• Other Colorado cities. Denver may not be the only Colorado city with an occupational privilege tax. We did not verify a statewide list, so check each city where you have staff.

Setting it up in payroll software

The OPT is a flat monthly amount with an earnings test, which is unlike the percentage taxes most payroll tools are built around. Ask your provider whether it carries the OPT as a local tax with the $500 test built in, or expects you to add a custom deduction plus a separate employer liability, and whether it files the return or only tracks the amounts. OnPay's pricing page says local tax filings are included at $49 a month plus $6 per worker (checked October 16, 2026). Compare providers in our payroll software rankings, see 2026 SUTA rates, and read how a percentage-based city tax compares in Kansas City and St. Louis or the payroll tax hub.