Minnesota payroll taxes for employers (2026)

Two new costs and a high wage base: what is different in Minnesota

Paid Leave is the change that hits every Minnesota payroll. The premium is 0.88% of wages up to the Social Security wage base ($184,500 in 2026, $192,300 in 2027). You can deduct up to half from employees. A small employer, meaning 30 or fewer employees with an average wage at or below 150% of the state average, has its employer share cut in half, so the total drops to 0.66% when the employee pays 0.44%. DEED held the rate at 0.88% for 2027, according to a July 31, 2026 Minnesota Reformer report.

The UI side has more moving parts than most states. Minn. Stat. 268.051 subd. 5 builds the new employer rate from your industry's average experience rate, a 0.40% base rate and the additional assessment, with a 1% minimum. Bloomberg Tax, a secondary source, counts 51 industry rates for 2026 ranging from 1% to 8.9%. The additional assessment is 14.00% of quarterly UI tax due, and the Workforce Development Fund adds 0.10% of taxable wages. Construction, mining and road building start at the average for high experience rating industries; we did not find the 2026 figure.

• No tip credit: the $11.41 minimum wage applies to tipped workers too. It rises to $11.87 on January 1, 2027.
• Fired workers can demand pay within 24 hours of a written demand (181.13). Workers who quit are paid on the first regular payday after leaving, or the next one if it is under 5 days away, with a 20 calendar day limit (181.14).
• Pay at least every 31 days, and transitory workers every 15 days.
• PEOs register with the Department of Commerce as employee leasing companies, per Harbor Compliance (secondary).

Minnesota employer payroll facts at a glance

Minnesota employer cost for a $50,000 employee

The lowest-case 2026 bill: 1% UI and half of Paid Leave deducted.

At the 8.9% top of the industry range Bloomberg Tax reports, the UI line alone would be 8.9% x $44,000 = $3,916.00, so your industry code drives most of the state cost. A qualifying small employer pays 0.22% x $50,000 = $110.00 for Paid Leave instead of $220.00. Check how Minnesota's $44,000 base compares on the SUTA rates by state for 2026.

Steps to register as a Minnesota employer

1. Get a federal EIN.
2. Create an employer account with Minnesota Unemployment Insurance (ui.mn.gov, Register for an Account, then Employers). Your industry code sets your starting rate.
3. Register for withholding with the Minnesota Department of Revenue and load the 2026 tables.
4. Set up Paid Leave premium reporting with DEED and choose the employee share you will deduct.
5. Report new hires within 20 days (mn-newhire.com).
6. Insure workers comp; Minnesota requires it for all employers, through a private carrier or self-insurance.

A Minnesota payroll calendar for 2026

Paid Leave premiums are paid by quarter; the first payment, for January to March, was due April 30, 2026. Line those dates up with your quarterly UI wage reports and Form 941. Paydays must come at least every 31 days. If you were looking for the State of Minnesota payroll calendar because you are a state employee, this page is for private employers; ask your agency's HR office for that schedule.

Payroll software should handle both premiums, the industry UI rate and the 6.25% bonus rate. Compare providers on our payroll software rankings and the true monthly bill in payroll service costs. For a bundled option, see the best PEOs. Hiring in Wisconsin or Iowa too? Their rules differ.