Colorado Wage and Payroll Tax Facts

Miscellaneous Colorado Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. Colorado currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in Colorado pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Paid Sick Leave (PSL) Taxes

The state of Colorado doesn't require employers to collect PSL taxes, but it does have a program providing such leave to eligible employees:

Colorado PSL Details
Covered Employees	All employees in the state
Accrual Method(s)	One hour for every 30 hours worked
Annual Accrual Maximum	48 hours
Carryover Maximum	48 hours
FAQs	Healthy Families and Workplaces Act (HFWA)

Paid Family and Medical Leave (PFML) Taxes

Like SDI, Colorado’s Family and Medical Leave Insurance (FAMLI) program is funded via mandatory payroll deductions and employer contributions.

Colorado FAMLI Details
Covered Employees	Most employees who have earned at least $2,500 in wages within the state over the period of one year. Self-employed workers may choose to opt into coverage if they both live and work in the state.
Covered Employers	All employers with at least one covered employee, except for local government employers and employees, federal employees, and self-employed individuals.
Tax Rate	0.9% of an employee’s gross wages up to the federal wage base for social security taxes. This rate is split evenly (0.45% for each) between employers and employees, except for employers with 9 or fewer employees, who are only required to collect and remit the employee’s 0.45% portion to the state.
Wage Base Limit	$168,600 (2024) $176,100 (2025)
FAQs	FAMLI FAQs for Employers FAMLI FAQs for Employees

Note, the FAMLI program is not the same as the state’s Family Medical Leave Act (FMLA) which provides up to 480 hours of protected, unpaid leave to eligible workers within a 12-month period.

Local Taxes

In addition to the state-wide taxes mentioned above, the following cities and localities also require an Occupational Privilege Tax (OPT), also known as a “head tax”:

• Aurora (employers with 25 or more employees file these returns monthly, while employers with fewer employees file them quarterly.)
• Denver (employers doing business in the city and county must have an OPT account; if there are no employee wages to report, but the account is still open, employers must file a “0” return as they’re still liable for a $4.00 cost of doing business fee each month the account is open.)
• Glendale
• Greenwood
• Sheridan
  

Colorado Employer Registration

The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Revenue for withholding tax topics and the Department of Labor & Employment for unemployment tax topics.

Registration Details	Department of Revenue	Department of Labor & Employment
Phone	(303) 592-5920	(303) 318-9100
Online Registration	MyBizColorado Registration
Registration Form	Form CR 0100	N/A*
Registration Instructions	Online and paper registration options are available, but non-profit organizations must use paper registration. Account numbers are issued in 2-3 days via online process or 7-14 days via mail. Separate account numbers for each tax type are issued under a combined registration.	Account numbers are issued in 7-14 days via mail. Separate account numbers for each tax type are issued under a combined registration.
Employer Self-Service Login	Department of Revenue Login Page	MyUI Employer+ Login Page

*Employers experiencing difficulties with online registration (or those without the ability to register online) should contact the Department of Labor & Employment for assistance.