Massachusetts Hourly Paycheck and Payroll Calculator

Massachusetts Hourly Paycheck Calculator

Massachusetts employers have payroll taxes and some unique payroll rules.

Although payroll accountants and payroll software can take care of your Massachusetts payroll for you, we’ll let you know some of the key details here in case you want to have a go at it yourself.

Massachusetts payroll taxes

Here’s what you need to know about withholding payroll taxes in Massachusetts.

• Massachusetts payroll taxes start with employees filling out Form M-4. This information helps you determine how much you should withhold. 
• If an employee does not complete this form, you will need to withhold tax as though no exemptions were claimed.
• Employees only need to update Form M-4 in case of life events (such as marriage, divorce, birth or adoption of a child, etc.) which may impact their taxes.
• The personal income tax rate in Massachusetts is 5%.

Additional Massachusetts forms

In addition to Form M-4 mentioned above, Massachusetts employers also need to file the following forms:

1. Employer’s Return of Income Taxes Withheld (M-941)*
2. Reconciliation of Massachusetts Income Taxes Withheld for Employers (M-3)
3. Wage and Tax Statement (State W2)
4. Paid Family & Medical Leave Quarterly Filings
5. Quarterly Employment and Wage Detail Report (SUI, EMAC, and workforce training fund)
6. MA New Hire Report

Massachusetts unemployment tax rate

Massachusetts requires most employers to pay unemployment insurance tax to help compensate workers who are out of work through no fault of their own. 

• Employers pay Massachusetts unemployment tax on the first $15,000 of an employee’s wages.
• New employers in the construction industry pay at a rate of 5.55%.
• New employers who are not in the construction industry pay at a rate of 1.45%.
• Experienced employers pay at a rate of 0.56–8.62%.
• Unemployment tax in Massachusetts should be paid quarterly through the unemployment tax registration on the Commonwealth of Massachusetts website.

Paying Massachusetts taxes

Here’s what you need to know about paying Massachusetts taxes:

• How often employers pay depends on the amount of tax you withhold in a year. Massachusetts’s payment frequencies are annually, quarterly, or monthly. 

Other Massachusetts taxes

Massachusetts employers are also required to pay or withhold the following taxes.

• Massachusetts Employer Medical Assistance Contribution (EMAC)
• Massachusetts Paid Family & Medical Leave (PFML) 

Massachusetts minimum wage

In 2023, the minimum wage in Massachusetts is $15 per hour for non-tipped employees and $6.75 for tipped employees. 

Massachusetts overtime pay

Because Massachusetts doesn’t have any state law governing overtime pay, the federal rules under the Fair Labor Standards Act apply. Generally speaking, hourly employees are to be paid time-and-a-half for all hours worked over 40 hours in a week.

Workers’ Compensation

Requirements to obtain Workers’ Compensation vary by state. This table outlines some of these requirements. If you determine that your company is required to purchase Workers’ Compensation insurance in your state, learn how to sign up for this insurance with Gusto. Sometimes, companies get a request for a workers’ comp audit—head to this article and click the workers’ comp audit reports dropdown for more information. 

New hires

Employers in Massachusetts need to report new employees.

• New hires must be reported to MassTaxConnect.
• New hires must be reported within 14 days of their first day of work. 

Payroll stubs

You must provide a pay stub to every employee that includes:

1. Company’s legal name and address
2. Employee’s name and last four digits of their Social Security number
3. Pay period beginning and end dates
4. Total hours worked
5. Rate of pay
6. Gross wages
7. The amount and reason for any deduction

Final paychecks

Employers must pay final wages to employees on their last day.

Time off

Massachusetts law requires employers to provide the following types of time off to employees.

1. Jury duty
2. Voting leave: If they request voting leave, employees in the manufacturing, mechanical, and mercantile (retail) industries may have time off during the first two hours that the polls are open.  
3. Family & parental leave: Employers are subject to the unemployment insurance law. This includes parental leave for employers with six or more employees. For employers with 50 or more employees, it includes leave for routine medical/dental appointments for children and elderly relatives.
4. Sick leave: Paid leave is required for companies with 11 or more employees. Sick leave may be unpaid if there are fewer than 11 employees.
5. Domestic violence leave: This is required for companies with 50 or more employees under abusive behavior leave law. It is required by all employers under sick leave law.

Federal payroll taxes

In addition to Massachusetts-specific taxes, both you and your employees will pay a variety of federal payroll taxes. Check out the breakdown below.

Federal income tax

Unless they are exempt, your employees will pay federal income tax.

• You must withhold federal income tax from employees’ pay, unless they are exempt. 
• Each employee’s Form W-4 will differ based on their filing status and dependents, among other details—so the amount of income tax to be withheld will vary.
• Form W-4 does not need to be sent to the IRS, but should be kept for your records.

FICA

Both you and your employees will pay Federal Insurance Contributions Act, or FICA tax.

• FICA is made up of the Medicare tax and the Social Security tax. 
• In 2023, the Social Security tax requires employers and employees to each contribute 6.2% of wages up to $2,600. 
• The Medicare tax requires employers and employees to each contribute 1.45% of all wages. 
• See the IRS webpage for details, like maximum thresholds.

FUTA

Like the state, the federal government also has an unemployment tax, called FUTA, which is paid by employers.

• FUTA is an annual tax an employer pays on the first $7,000 of each employee’s wages. 
• The FUTA rate for 2023 is 6.0%, but many employers are able to pay less, for instance, up to 5.4% each year due to tax credits.
• Most employers will pay this tax annually with Form 940. But larger employers with more than $500 in tax due will have to pay quarterly. 

Additional Medicare tax

The Additional Medicare tax is paid by employees. Here’s what you should know:

• For employees that earn over $200,000 per year, 0.9% of earnings will need to be withheld for the Additional Medicare tax. 
• Whether or not your employee owes this tax may depend on their filing status.

Paying federal taxes

How often you’ll pay federal payroll taxes depends on how much you owe.

• Semi-weekly or monthly payments are required for federal withholding, Additional Medicare, and FICA taxes. And every quarter, a summary payroll tax return is due on Form 941, Employer’s Quarterly Federal Tax Return.
• Quarterly or annual payments are required for federal unemployment tax. Most employers will pay annually, but quarterly payments are necessary if you owe more than $500. Each time you make a payment, you’ll need to file a payroll tax return on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.

We’re here to help

If you don’t love manual number crunching and payroll taxes sound overwhelming to you, take advantage of Gusto’s full-service payroll options or use an experienced accountant to help you with the process.