Maryland FAMLI Payroll Deductions Start in January 2027. D2D Is Covering Its Employees' Share.
In the first pay period of January 2027, a new line shows up on almost every Maryland pay stub. It's the employee contribution to Maryland FAMLI, the state's paid family and medical leave program, and for most workers it's 0.45% of wages.
That's small. It's also money that leaves a paycheck a full year before anyone can claim a benefit. Benefits don't start until January 2028.
Diapers 2 Deposits, Inc. (D2D) has already decided how it will handle the deduction for its own staff: D2D's employee handbook commits the organization to cover employees' FAMLI contributions up to 1% of covered wages. Here's how Maryland FAMLI works, what it costs, what it pays, and why a financial literacy organization chose to pay its team's share.
Key Takeaways
Maryland FAMLI payroll deductions begin in the first pay period of January 2027, and paid leave benefits begin in January 2028, according to the Maryland Department of Labor.
The 2027 Maryland FAMLI contribution rate is 0.9% of covered wages, and employers may withhold up to half of it, 0.45%, from employee paychecks, per the Maryland Department of Labor's April 2026 FAQ.
Employers with fewer than 15 employees are exempt from the employer half of the contribution, and the Maryland Department of Labor estimates more than 80% of Maryland employers qualify for that small employer discount.
Maryland FAMLI pays up to 90% of a worker's wages, capped at $1,000 a week, for up to 12 weeks of job-protected leave, or up to 24 weeks when a worker has both a serious health condition and a new child in the same year.
Diapers 2 Deposits covers its employees' FAMLI contributions up to 1% of covered wages, which pays the full employee share at the 2027 rate.
What Is Maryland FAMLI?
Maryland FAMLI (Family and Medical Leave Insurance) is the state insurance program behind Maryland paid family leave. It pays workers part of their wages while they take job-protected leave for a new child, a serious health condition, a family member's serious health condition, or a family member's military deployment. Employers and employees fund it through payroll contributions, and the Maryland Department of Labor's FAMLI Division runs it.
FAMLI was created by the Time to Care Act, passed by the Maryland General Assembly in 2022. Its start dates were pushed back more than once, most recently by a 2025 law.
Governor Wes Moore announced on September 1, 2026, that employer registration was live at paidleave.maryland.gov. Every employer with at least one Maryland-based employee has to register. In the Department of Labor's announcement, Moore said Maryland workers "deserve time to manage the biggest moments in life" without worrying about losing their jobs.
The FAMLI timeline, in order:
Date | What happens |
September 1, 2026 | Employer registration opens |
November 15, 2026 | Deadline for employers to file a Declaration of Intent if they want a private plan in 2027 |
First pay period of January 2027 | Payroll contributions begin |
April 30, 2027 | First quarterly contribution payment due |
July 2027 | Employers must notify employees about FAMLI leave and benefits |
January 2028 | Benefits become available |
How Much Will FAMLI Take From a Maryland Paycheck?
The Maryland FAMLI contribution rate for 2027 is 0.9% of covered wages, up to the Social Security wage base. Employers can withhold up to half of that, 0.45%, from each employee's paycheck. A worker earning $1,000 in a pay period would see up to $4.50 deducted. Employers can also choose to pay the employee share themselves.
The Maryland Department of Labor reaffirmed the 0.9% rate in April 2026. It applies to wages paid from January 1 through December 31, 2027. Starting in November 2027, the Department will announce each following year's rate.
Here's what the maximum 0.45% employee deduction looks like at a few pay levels:
Gross pay | FAMLI employee deduction (0.45%) |
$300 (20 hours at $15, a typical teen summer job) | $1.35 |
$1,000 per paycheck | $4.50 |
$50,000 per year | $225 per year |
The rate can change, but not without limit. Under current law, the total FAMLI contribution rate can't go above 1.2% of wages, according to the Department of Labor's FAMLI FAQ. Because employers can withhold at most half the rate from employees, the most a Maryland worker can be charged under current law is 0.6% of covered wages.
The deduction is the same for salaried and hourly workers. Part-time and seasonal workers contribute too. FAMLI doesn't exclude any group of employees, and nobody can opt out.
If you're new to reading a pay stub, D2D's guide on how to read a pay stub walks through every deduction line. Starting in 2027, Maryland workers will have one more line to find.
How Does the FAMLI Small Employer Discount Work?
The FAMLI small employer discount exempts businesses with fewer than 15 employees from paying the employer half of the contribution. Small employers still remit the employee half, 0.45% of wages in 2027, and they can withhold it from employee paychecks. The Maryland Department of Labor estimates that more than 80% of Maryland employers qualify.
A few details trip people up:
Every employee counts. The 15-employee test counts workers inside and outside Maryland. Independent contractors don't count.
Size is measured quarterly at first. In 2027, the FAMLI Division will check employer size each quarter. After a full year of reports, it averages the four quarters and applies that size to the next year.
One registration per EIN. All divisions and locations under the same federal Employer Identification Number register together and count as one employer.
For workers at small businesses, the discount changes the employer's bill, not necessarily the worker's paycheck. A small employer can still deduct the full 0.45% from employee pay.
What Do Maryland Workers Get for the FAMLI Deduction?
Maryland FAMLI gives eligible workers up to 12 weeks of job-protected, partially paid leave in a 12-month period, starting in January 2028. The benefit replaces up to 90% of a worker's wages, capped at $1,000 a week. Workers qualify after 680 hours of work in Maryland over the four reported quarters before their leave.
Maryland paid family leave covers four reasons:
Welcoming a child through birth, adoption, foster care, or kinship care
A worker's own serious health condition
Caring for a family member with a serious health condition
Handling needs tied to a family member's military deployment
A worker who has both a serious health condition and a new child in the same benefit year can take up to 12 weeks for each, for a total of up to 24 weeks.
The benefit formula favors lower earners. A Maryland worker earning $15 an hour full time makes $600 a week, and the FAMLI Division's own example puts that worker's benefit at $540 a week, or 90% of wages. Higher earners get a smaller percentage, and no one gets more than $1,000 a week.
Workers don't choose their plan. The employer decides whether to stay in the State Plan, buy a commercial private plan, or (in limited cases) self-insure. Every private plan has to match or beat the State Plan, and it can't charge employees more than the State Plan would.
Why D2D Is Paying Its Employees' FAMLI Contributions
Diapers 2 Deposits' employee handbook commits the organization to cover employees' FAMLI contributions up to 1% of covered wages. At the 2027 rate, the employee share is 0.45%, so D2D employees get full FAMLI coverage with no FAMLI deduction from their take-home pay.
The 1% ceiling matters less than it might look. Under current law, the total FAMLI rate is capped at 1.2%, which puts the most any employer can withhold from an employee at 0.6%. D2D's 1% commitment sits above that. The handbook provision that shifts the amount above 1% to the employee would only come into play if Maryland lawmakers raised the cap.
The Maryland Department of Labor confirms employers are allowed to pay the employee share as an added benefit. It also notes there may be tax implications, and it tells employers to check with a tax professional before doing it. Any Maryland employer weighing the same move should do that first.
For D2D, the choice ties straight back to the work. D2D teaches young people to read a paycheck and understand what every deduction buys.
In D2D's Game of Life financial literacy simulation, the first stop is the Payday station. Participants get a paycheck, see taxes and deductions come out, and then decide how to split what's left across spending, saving, and giving. D2D has run the simulation for 166 Baltimore YouthWorks participants.
Starting in 2027, that paycheck has a FAMLI line on it. D2D's handbook decision is the same lesson from the employer's side: a benefit can show up as a deduction, or an employer can choose to absorb it. Young workers should know both are possible, and know to ask which one they're getting.
What Maryland Employers Should Do Before January 2027
Maryland employers need to register for FAMLI, choose a plan, decide whether to pay any of the employee share, and notify employees before the first deduction. Registration opened September 1, 2026, and withholding starts in the first pay period of January 2027.
The first quarterly payment is due April 30, 2027.
Register at paidleave.maryland.gov. An authorized officer who can legally act for the business has to complete the first registration. A payroll provider or accountant can't do that step, but can be added afterward.
Decide on a plan. Every registered employer is enrolled in the State Plan automatically. Employers that want a private plan in 2027 must file a Declaration of Intent by November 15, 2026.
Decide who pays the employee share. Employers can withhold up to 0.45% from employees in 2027, cover part of it, or cover all of it, as D2D does. Employers can also cover contributions for a select group of employees. Check tax treatment first.
Update the handbook and payroll system. Payroll software needs the new deduction set up before the first January pay run.
Notify employees. Employers have to notify employees one pay period before deductions begin, again starting in July 2027, at hire, once a year, and when an employee asks about or takes qualifying leave.
The FAMLI contributions page covers how rates are set and how quarterly payments work. FAMLI Customer Care is available at (410) 525-4010 or paid.leave@maryland.gov.
Maryland FAMLI FAQ
When do Maryland FAMLI deductions start?
Maryland FAMLI deductions start with the first pay period in January 2027. Employers remit contributions quarterly, and the first payment is due April 30, 2027. Benefits don't begin until January 2028, so 2027 is a funding year.
How much is the Maryland FAMLI employee contribution?
The Maryland FAMLI employee contribution is up to 0.45% of covered wages in 2027, which is half of the 0.9% total rate. On a $1,000 paycheck, that's up to $4.50. Under current law, the employee share can't exceed 0.6%.
Can my employer pay my FAMLI contribution for me?
Yes. The Maryland Department of Labor allows employers to pay some or all of the employee share as a benefit, and they can do it for a select group of employees. Diapers 2 Deposits covers its employees' contributions up to 1% of covered wages. The Department notes there may be tax implications.
Do small business employees still pay into FAMLI?
Yes, usually. Businesses with fewer than 15 employees skip the employer half of the contribution, but they still remit the employee half and can withhold it from paychecks. The discount lowers the employer's cost, not the employee's deduction.
Can I opt out of Maryland paid family leave?
No. Maryland FAMLI covers every employee working in a position based in Maryland, including part-time and seasonal workers. Federal employees are the main exception, because they aren't covered and don't contribute.
What to Do Next
Maryland FAMLI is a trade most workers will come out ahead on: a deduction of less than half a percent of wages buys up to 12 weeks of paid, job-protected leave when life gets hard. Look for the new line on your first pay stub of 2027, and ask your employer whether they're covering any of it.
Employers have until the first January pay run to register, choose a plan, and decide who pays the employee share. D2D made its call early. If you're thinking about joining a team that already covers it, D2D is hiring financial literacy instructors.
If you run a school, youth program, or workforce site and want young people ready for their first paycheck, deductions included, explore D2D's financial literacy programs for organizations.
This article is general financial education, not tax or legal advice. For your specific situation, talk with a tax professional or the FAMLI Division.
Whitney Ramirez is an Accredited Financial Counselor (AFC) and the Founder and CEO of Diapers 2 Deposits, Inc.
