Maine Wage and Payroll Tax Facts
February 02, 2024
Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of Maine.
The state of Maine imposes substantially higher minimum wage rates than those required by the federal government in the Fair Labor Standards Act (FLSA). Case in point, the overall minimum wage rate is nearly double the FLSA required rate.
Moreover, Portland and Rockland City also have local minimum wage rates that are similarly higher than the federally required rates.
When it comes to processing payroll, Maine-based organizations must handle the following taxes in addition to those required by the federal government:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
The below information was last updated January 30, 2024. It is not intended as legal or tax advice.
Maine Minimum Wage Rates
|
Wage Type |
Maine Rates |
Federal Rates |
|
Minimum Wage |
$14.15 |
$7.25 |
|
Tipped Minimum Wage |
$7.08 |
$2.13 |
|
Actual Tip Credit |
$7.07 |
$5.12 |
Local Minimum Wage Rates
In addition to the state-wide minimum wage rates above, some cities have unique minimum wage rates as well:
|
Wage Type |
Portland Rates |
Rockland City Rates |
|
Minimum Wage |
$15.00 |
$15.00 |
|
Tipped Minimum Wage |
$7.50 |
$7.08 |
|
Actual Tip Credit |
$7.50 |
$7.92 |
Maine State Income Tax (SIT) Rates
Maine's SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax.
| Filing Status | Income Tax Bracket [Over X] - [But not over Y] |
2024 Income Tax Rates |
| Single | $0 - $26,050 | 5.80% of excess over $0 |
| $26,050 - $61,600 | $1,511 + 6.75% of excess over $26,050 | |
| $61,600 or greater | $3,911 + 7.15% of excess over $61,600 | |
| Married | $0 - $52,100 | 5.80% of excess over $0 |
| $52,100 - $123,250 | $3,022 + 6.75% of excess over $52,100 | |
| $123,250 or greater | $7,825 + 7.15% of excess over $123,250 |
|
Additional Maine SIT Details |
|
|
Supplemental Withholding Computation |
5.00% |
|
Valid Filing Statuses |
|
|
Exemptions |
|
|
Form W-4 |
Form W-4ME |
|
Reconciliation Frequency |
Annual |
Maine State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
|
Maine SUI Tax Details |
|
|
Taxable Wage Base |
$12,000 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
0.28% – 6.03% |
|
Rates for New Employers* |
2.32% |
|
Effective Period |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; due 30 days from rate notice mailing date |
*This includes the base 2.04% rate, the 0.15% Unemployment Program Administration Fund tax, and the 0.13% Competitive Skills Scholarship Fund tax.
Maine State Disability Insurance (SDI) Rates
SDI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. Maine, however, doesn't require employers to collect an SDI tax.
Miscellaneous Maine 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. Maine currently has no reciprocal agreements with any other states.
This doesn’t mean, however, that interstate workers living in Maine 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)
The state of Maine doesn’t require employers to collect PSL taxes, but it does have an Earned Paid Leave (EPL) program providing such leave to eligible employees:
|
Maine PSL Details |
|
|
Covered Employees |
All, except for those in seasonal industries |
|
Covered Employers |
Those with more than 10 employees in Maine for more than 120 days in any calendar year. |
|
Accrual Method(s) |
1 hour per 40 hours worked |
|
Carryover Maximum |
40 hours |
|
Annual Accrual Maximum |
40 hours |
|
Probationary Period |
120 days (optional) |
| Frontloading Allowed | Yes |
|
FAQs |
Earned Paid Leave General FAQs |
Paid Family and Medical Leave (PFML)
Maine's PFML program will be funded via mandatory payroll deductions and employer contributions. It will begin collecting contributions January 1, 2025, and eligible employees will be able to begin submitting claims on January 1, 2026.
|
Maine PFML Details |
|
|
Covered Employees |
All full and part-time employees who've earned at least six times the state average weekly wage in the first calendar quarters immediately preceding the first day of the employee's benefit year |
|
Covered Employers |
All (regardless of employer size) except federal government employers |
|
Amount of Leave |
Up to 12 weeks each for family and medical leave |
|
Leave Use Maximum |
16 weeks in a single year |
|
Tax Rate |
1.00% (split evenly between employers and employees) |
|
Wage Replacement |
90% of income equal to or less than 50% of the state's average weekly wage ($1,036). If an employee's wages exceed 50% of the state's average weekly wage, the program will replace 66% of the wages up to the maximum weekly benefit. |
Maine Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact Revenue Services for withholding tax topics and the Department of Labor for unemployment tax topics.
|
Registration Details |
Revenue Services |
Department of Labor |
|
Phone |
(207) 624-5644 |
(207) 623-7900 |
|
Online Registration |
Maine Tax Portal Homepage | ReEmployME Employer Registration Page |
|
Registration Form |
Application for Tax Registration | ReEmployME Employer Registration Form |
|
Registration Instructions |
Online and paper registration options are available. Account numbers will be issued in 3-5 days via online process or 3-5 weeks via mail. | |
|
Employer Self-Service Login |
Maine Tax Portal Homepage | |
Additional Maine Payroll Tax Resources
- Revenue Services' About Maine Tax Portal
- Revenue Services' Employer Withholding Forms
- Department of Labor Forms and Publications
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.
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