Colorado FAMLI premium drops to 0.86% in 2027: what the cut is worth on your paycheck
Colorado's paid family and medical leave premium drops from 0.88% to 0.86% of wages on January 1, 2027, so the most your employer can deduct falls from 0.44% to 0.43% of your pay. For a full-time worker at $20 an hour, the saving is $4.16 a year, sixteen cents a biweekly check. It's also the first rate the program set on its own.
Colorado's paid leave premium is going down again. The total FAMLI premium drops from 0.88% of wages in 2026 to 0.86% starting January 1, 2027, the state's Department of Labor and Employment announced on October 6, 2026. Workers can be charged at most half of that, so the most your employer can take out of your paycheck falls from 0.44% to 0.43% of gross wages.
That is a cut of one hundredth of a percent of your pay. It won't change anyone's budget, but it does show up on every stub, and it's the first time the program's own managers, not voters or the legislature, set the rate.
What changes on your paycheck
For a full-time worker at $20 an hour, the yearly deduction goes from $183.04 to $178.88, so you keep $4.16 more over 2027. On a biweekly paycheck of $1,600 the FAMLI line drops from $7.04 to $6.88: sixteen cents. Here's that check in full, with the tax lines on 2026 rules because Colorado's 2027 withholding figures aren't out.
The FAMLI deduction comes off last because it doesn't reduce your taxable pay. The program's employer guidance calls premiums post-tax deductions and tells employers to report them in box 14 of your W-2, labeled "FAMLI." The percentage applies to gross wages, which include overtime, tips, bonuses, commissions and paid time off, but not severance or expense reimbursements.
Higher earners save a little more, though never much. At $75,000 a year the employee share falls from $330.00 to $322.50. The premium stops at the Social Security wage base. The 2027 base hadn't been published when Colorado announced the rate; at the 2026 base of $184,500, the most a worker could pay would drop from $811.80 to $793.35. Treat that ceiling as a placeholder until the new base is out.
| Year | Total premium | Most a worker pays | At $20/hour, full time |
|---|---|---|---|
| 2023 to 2025 | 0.90% | 0.45% | $187.20 |
| 2026 | 0.88% | 0.44% | $183.04 |
| 2027 | 0.86% | 0.43% | $178.88 |
If you work for a small business
Size matters for the employer, not for you. A business with 10 or more employees pays the employer half of the premium, so in 2027 it sends in 0.86% of each worker's wages in total and can deduct up to 0.43% from the paycheck. A business with nine or fewer employees owes no employer premium at all. It still remits the employee share, 0.43% in 2027, which it can deduct from your pay. Either way the worker's maximum is the same.
Headcount is counted once a year: employees on the payroll for 20 or more calendar workweeks in the previous year. Some employers choose to pay the worker's share themselves, which the law allows. If your stub shows no FAMLI line, that may be why. And if payroll simply forgets, the employer can't make up the missed premium out of later paychecks.
Why the rate fell, and how it got here
The program started collecting in 2023 at 0.9% of wages, a rate written into the 2020 ballot measure, split evenly between employers and workers. Benefits began in 2024: up to 12 weeks of paid leave for your own serious health condition, to care for a family member, to bond with a new child, for a family member's military deployment or to seek safety from domestic violence. A 2025 law, SB 25-144, trimmed the rate to 0.88% for 2026.
The 2027 cut is different. It is the first rate set administratively by the FAMLI Division, which has to recalculate the premium every year after 2025. The state says actuarial projections done in June 2026 support the lower rate, and that the program has paid out roughly $2.25 billion in benefits to more than 425,000 Colorado families since it began. Whatever the Division decides in future years, state law caps the total premium at 1.2%.
The contrast with Maryland is sharp. Its new FAMLI program starts deducting 0.45% of pay in January 2027, a full year before anyone there can claim a benefit, while Colorado workers pay slightly less into a program that has been paying claims for nearly three years.
To see the change on your own pay, run your wage through the calculator: it already applies the Colorado FAMLI deduction, and from January the line should read 0.43% of your gross.
Questions
Who pays Colorado FAMLI premiums?
Almost every private employer in Colorado with at least one employee, for full-time, part-time and seasonal workers alike. Employers with 10 or more employees pay half of the premium themselves; those with nine or fewer only send in the employee half. Self-employed people and workers at local governments that opted out can join voluntarily.
Is the Colorado FAMLI deduction taken out before taxes?
No. The FAMLI Division describes premiums as post-tax deductions, so they don't lower the income your federal or Colorado tax is figured on. Your employer reports what you paid in box 14 of your W-2, labeled FAMLI. Benefits you receive are not subject to Colorado income tax, and you can choose to have 10% federal tax withheld from them.
Can the Colorado FAMLI rate go back up?
Yes. The FAMLI Division recalculates the premium every year, so a later rate could be higher if claims grow faster than the fund. State law caps the total premium at 1.2% of wages, which would put the worker's maximum share at 0.6%, or $249.60 a year at $20 an hour full time.