Maryland's paid family and medical leave program has been delayed more than once.

So a lot of payroll teams stopped watching it. We get it.

But this time the date is real. Payroll deductions for Maryland FAMLI (Family and Medical Leave Insurance) begin on January 1, 2027. That is less than three months away, and several of the steps have to happen before the first paycheck of the year, not after.

Here are the 5 things we would get done now.

#1. Know the number: 0.9%, split in half

The Maryland Department of Labor set the first-year rate at 0.9% of wages, up to the Social Security wage cap. It applies to wages paid from January 1 through December 31, 2027.

• The split is equal. 0.45% from the employer, 0.45% from the employee. You can withhold up to half of the total rate from employee pay.

• Same rate for everyone. Salaried and hourly employees pay the same percentage.

• The cap is per job. The state says the wage cap is determined separately for each job, so you do not track what an employee earns elsewhere.

• It will change. Each November, starting in 2027, the state announces the next year's rate. Under current law it cannot exceed 1.2%.

On a $60,000 salary, that is $270 a year from the employee and $270 from you. Small per person. Not small across a client base.

The state's contribution rates and remittance rules are worth reading in full.

#2. Count your employees the way Maryland does

Small employers get a break. If you have fewer than 15 employees, you only remit 50% of the total rate, and you may withhold that amount from employee pay.

Here is the part people miss.

The count includes employees inside and outside Maryland. A 40-person company with 3 people in Baltimore is not a small employer.

And during 2027, the state checks employer size every quarter, based on your quarterly reports. Starting in 2028, it uses the average of the previous 4 quarters. If a client hovers around 15 employees, their rate can change from one quarter to the next in year one.

Very, very easy to get wrong if headcount lives in one system and payroll setup lives in another.

#3. Register yourself. Your payroll provider can't.

If you have at least one employee in Maryland, you are required to register with the FAMLI Division. The state says there are no exceptions.

Ok, ok, you say, our payroll provider handles this.

Not this step. Third-party agents (CPAs, payroll and HR providers) cannot register on an employer's behalf. The employer registers first. After that, the provider can be granted a power of attorney to file reports, remit contributions, and respond to claims.

If you are a payroll provider, that means every Maryland client has homework before you can do yours. Start that outreach now, not in December.

#4. Put two dates on the calendar before January

• November 15, 2026. Employers who intend to use a private plan in 2027 instead of the State Plan may submit a Declaration of Intent to the FAMLI Division by this date. Submissions opened September 1. Private plans can set their own rates, but employees cannot be charged more than they would pay under the State Plan.

• One pay period before the first deduction. Employers who collect employee contributions must give employees notice one pay period before payroll deductions begin. For a January 1 start, that notice lands in December.

Miss the notice and your very first FAMLI deduction is already out of compliance. See the state's employer requirements and notice rules for the full list.

#5. April 30, 2027 is the real test

Deductions are the easy part. Reporting is where it gets tested.

You will file a Quarterly Wage and Hour Report and remit contributions electronically every quarter. Payment is due on the last day of the month after each quarter ends.

The first one covers wages paid January 1 through March 31, 2027. It is due April 30, 2027.

If the deduction code was set up wrong in January, you find out in April, with three months of payroll to correct. This is exactly why we think every payroll run should be its own compliance check.

Two more dates to know. Starting July 2027, all employers must give employees notice about FAMLI leave itself (at hire, annually, and when an employee requests leave). And benefits become available in January 2028: up to 12 weeks of paid, job-protected leave, at up to $1,000 per week.

The bottom line

Maryland FAMLI is not complicated. It is a rate, a headcount test, a registration, a notice, and a quarterly filing.

What makes it risky is timing. Five small steps, owned by different people, all due around the busiest weeks of the payroll year.

This is what we built Tada for. Current checks your existing HCM data against 2,500+ regulations, including Maryland FAMLI, and flags the employees and companies that are not set up correctly before the run goes out. Penny applies those rules as payroll is processed. And if you are moving clients to a new HCM platform this fall, our Implementation product carries the tax and deduction setup over with them.

Explore Tada products or book a demo.

This post is general information, not legal advice.