Minnesota Paid Family Medical Paid Leave

The same thing is happening to me. We are a small employer, and I was told to use 0.33% for the employer and 0.33% for the employee.  I spent an hour on the phone today with Intuit and was told it’s still in beta. 

Thanks for reaching out to the Community, CLRPC. I appreciate your detailed information.

Minnesota's Paid Family and Medical Leave (PFML) program is a new state-required tax that starts January 1, 2026. It gives employees paid time off for family and medical reasons. QuickBooks Payroll is currently being updated so you can set up and manage this tax for your covered employees. This program helps make sure your team has support when they need it most, and Intuit will be here to help you stay compliant.

Here's how to set up your PFML tax:
 

1. Use the Gear icon, then go to Payroll settings.
2. From Minnesota Tax, click your Pencil (Edit) icon.
3. Under Minnesota Paid Family and Medical Leave Tax (PFML) Leave, hit Start and specify the Minnesota full time employee count.
4. Indicate if you have a Paid Leave Only account number by choosing Yes or No.
5. Press Define Rates and enter your Policy name.
6. Pick an effective start date for the policy.
7. Enter your percentages for you and the employees.
8. Select Save, then Done.

Next, you'll need to add the policy to your employees.

If you're unsure of which percentages you should be entering  in step 7, I'd recommend working with a tax professional to help identify what amounts should be entered. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Please don't hesitate to send a reply if there's any questions. Have a wonderful Friday!

It still is not working correctly. My rates should be ER .33% and EE .33%. The contribution boxes say a minimum of 25%. This is incorrect. 

It still is not working correctly. My rates should be ER .33% and EE .33%. The contribution boxes say a minimum of 25%. This is incorrect. 

Small employers pay 25% and employees pay 50% of the total .88%

When they change the rate in the future, the 25% and 50% will stay constant.

I had a chat with Jordon from QB this am. QB is set up with the MN PFML contribution rates to total 75% (not sure why).

In my example of PFML total contributions being .66% (we are small employer under the paid leave law). Our contributions are employee rate is .44% and employer contribution rate is .22%.  In QB I had to put the employee's contribution rate as 50% and employer's contribution rate as 25%. 

I did start payroll for 1-1-2026 on one employee to see if the contribution rate was figured correctly.  It did show on the preview payroll that the employee's share was .44% and employer's share was .22% with what I figured manually.  Not sure why QB has is set up that why and never did really get an answer to that but it does work.  Hope this helps! 

25% of rate 88% and 50% of rate .88%.

In the future when the change the rate the 25% and 50% will stay the same.

Hi BakingReader, I understand the importance of setting up Minnesota's Paid Family and Medical Leave (PFML) correctly in your payroll system.

Since the PFML program is set to begin on January 01, 2026, as previously mentioned by my colleague, there’s no further action required in QuickBooks after you’ve completed your initial setup.

Once the feature is finalized and ready to be used, QuickBooks will notify you directly, along with step-by-step instructions.

For more information about the PFML program, please refer to this article: Set up Minnesota Paid Family and Medical Leave.

Please feel free to reach out if you have additional questions or need assistance.

Is there an option for QuickBooks Desktop??  I've tried everything I find online as far as instructions for this and MN PFML is nowhere to be found in the desktop version.  And, I have downloaded the latest payroll updates as of today. 

I'm unable to find any instructions for the initial setup for QB Desktop.  Anything I've found online so far is no help.  There is nothing about MN PFML in the desktop version that I can see.  I have the latest payroll updates and still nothing.  Help?? 

My rates are Employer .33% and Employee .33% for a total of .66%. 

Thanks for joining this thread, JKmn2025.

To set up Minnesota Paid Family and Medical Leave (PFML), you'll want to begin the process by confirming you've downloaded and installed your latest payroll update.

Here's how:
 

1. Go to Employees, then Get Payroll Updates.
2. To get the latest tax table, click Download Entire Update.
3. Select Update.

After verifying you're using the latest payroll update, there's a few things you'll want to be aware of before considering to make changes to the new MN PFML tax items:
 

• The Add Item Wizard will prompt you to enter the employer and employee tax rates.
• If you're exempt from the program enter 0%.
• If you're splitting the cost with your employees, enter a percentage between 0.1% and 0.44% for their portion of the tax.
• If as the employer, you're funding the program entirely, enter .88% or .66% for Co. Portion Rate and 0% for Emp. Portion Rate.
• The Add Item Wizard for the new MN PFML pay items will launch when you pay your employees or add any new Minnesota employees.

Now you can edit the new MN PFML tax items if necessary.

Please don't hesitate to send a reply if there's any additional questions. Have a wonderful Monday!

I downloaded the latest payroll updates.  The only update I saw for MN was for the MN UI base wage increase.  Now I have to "add item" in order to get the MN PFML payroll item in place? That doesn't seem right.  

I also see it says "The Add Item Wizard for the new MN PFML pay items will launch when you pay your employees or add any new Minnesota employees."  So I wait until I'm doing the first payroll of 2026 and see, if by chance, the Add Item Wizard launches and the percentages are correct??  That also doesn't seem right.  Is this only for the Desktop version?  I've seen others in this forum discussing the incorrect percentages they are seeing... how/where are they seeing them?  In the online version? 

Hi there, JKmn2025. 

I understand the importance of ensuring your Minnesota PFML (Paid Family and Medical Leave) payroll updates are applied correctly, so let me provide some clarification.

As mentioned by my colleague, the PFML program is scheduled to begin on January 1, 2026. After completing your initial setup in QuickBooks, no further action is needed for now. Once the feature is finalized, QuickBooks will notify you directly with step-by-step instructions.

The "Add Item Wizard" will automatically launch when you process your first payroll in 2026 or add a new Minnesota employee. However, you don't need to take action at this time unless you'd like to verify the setup in advance.

If you want to confirm setup accuracy or review percentages ahead of time, you can manually add or check the MN PFML payroll item. Some users testing their setups have reported potential discrepancies, but QuickBooks will provide finalized guidance before the program's start date. Any necessary updates will apply automatically. If anything remains unclear, reach out to our payroll live support team to help confirm the correct setup.

For more details about the PFML program, check out this article: Set up Minnesota Paid Family and Medical Leave.

Please don't hesitate to leave a Reply below if you have any further questions or require assistance.

 After completing your initial setup in QuickBooks, no further action is needed for now. 

What does the initial setup consist of?  This is part of what I'm not understanding.  

In Desktop we have it set up but the tax is calculating pretax when we are running a 2026 payroll.  This should be a post tax deduction …. How do we fix this? 

The items have been added and I am trying to run the first payroll of 2026 and it’s calculating pretax.  This should be a post tax deduction - how do we change this? 

We have this all set up but when running the first payroll of 2026, it’s calculating pretax this should be post tax.   How do we fix this? 

also when adding to new employees, it adds the regular ones and no ui ones - none of them add the rates.  

We have this all set up but when running the first payroll of 2026, it’s calculating pretax this should be post tax.   How do we fix this? 

Hi there, @danaolson. I appreciate your effort for letting us know that your 2026 payroll tax items have already been set up in your QuickBooks Desktop (QBDT) payroll account.
 
However, it is also worth noting the importance of updating your tax table for the 2026 payroll for accurate rates and calculations of your payroll tax items. This also ensures that it reflects the correct tax terms (Pre-tax or post-tax).
 
Here's how:

1. From the Employees tab, select Get Payroll Updates.
2. Then, know your tax table version by:
   - Check the number next to the You are using tax table version section:.
   - To determine if it's the correct version, see the latest payroll news and updates.
   -Click the Payroll Update Info to find more details about your tax table version.
3. Once done, get the latest tax table by choosing the Download Entire Update.
4. After that, select Update. When the download is complete, an informational window will appear.

You can read this article if you encounter any error during the update: Troubleshoot payroll tax table update errors.

Let me know if you have additional questions or clarifications. We're here to assist you promptly.

Quickbooks set up 4 accounts with the payroll update - Do I need to use all 4? Is either the medical leave or family leave still considered a taxable wage for MN Unemployment? I can't find any info on the website to confirm.. accounts are labeled:

MN - Paid Leave (No UI) Co.

MN - Paid Leave (No UI) Emp.

MN - Paid Leave Co.

MN - Paid Leave Emp. 

Hi there, Samantha.

QuickBooks automatically sets up the four (4) accounts to accommodate different scenarios in accordance with Minnesota's Paid Family and Medical Leave (PFML) program. However, you don't need to use all four (4) accounts unless your workforce includes employees both covered and exempt from unemployment insurance (UI).

The accounts you use depend on whether your employees are:

• Use MN - Paid Leave Co. and MN - Paid Leave Emp. for employees subject to UI.
• Use MN - Paid Leave (No UI) Co. and MN - Paid Leave (No UI) Emp. for those exempt from UI (ex., independent contractors, some exempt roles, or employees with Paid-Leave Only accounts).
• If you have both types of employees, you'll use the corresponding accounts for each group.

Since Minnesota's PFML program is managed through the unemployment system, PFML wages follow the same rules as UI wages. Contributions for employees covered by UI will be included in unemployment reporting, while exempt employees will require separate reporting through "No UI" accounts.

For more details about the PFML program, check out this article: Set up Minnesota Paid Family and Medical Leave.

To set up, identify which employees are covered or exempt under UI, then assign the correct QuickBooks accounts. QuickBooks guides you through defining rates, creating policies, and applying them to employees. If you're uncertain, consult Minnesota DEED or QuickBooks live support team for assistance to ensure compliance and prevent mistakes.

Please don't hesitate to leave a Reply below if you have any further questions or require assistance.

We are also doing 50/50 on the .66% as a small employer.  Instead of doing 25/50 = .22/.44, ChatGPT recommended doing 50% of 75%, so 37.5%.  QB will not allow decimals, so I think our solution until QB gets their crap figured out is 38% for Employer and 37% for Employee (total is 75%) and 38% of .88% = .3344 and 37% of .88%=.3256 = .66%.  I think this is the closest we can get it until A) QB fixes the percentages and lets us do a decimal place (ie. 37.5%) or changes the silly method they use to calculate this stuff.

How do you correctly set up the payroll item for the pick up contribution if the company is paying the employee portion of this rate.  I set up a payroll item according to the instructions received as a fringe benefit and added this to the "other payroll items". With this the SS and Medicare taxes are calculated on this pick up amount (.44% of salary) but it also added another .44% to the company taxes due which already has the .66% added.  Now the amount it is showing for the company taxes are two lines -- one at .44% and one at .66%.  The other concern is that the pick up amount is not showing as an income and the instructions indicate that this amount needs to show in boxes 1, 3, and 5 of the 2026 W2.  I called the hot line and they were no help.