Colorado uses minimum wage rates that are substantially higher than the rates required by the federal government. Case in point, the rates required by the city of Denver are over twice as high as the federally required rates. The state also has a paid sick leave program guaranteeing time off for eligible employees
When it comes to processing payroll, Colorado-based organizations must handle the following taxes in addition to those required by the federal government
The below information was last updated July 28, 2023. It is not intended as legal or tax advice
Colorado Minimum Wage Rates
Wage Type
Denver Rates
Colorado Rates
Federal Rates
Minimum Wage
$17. 29$13. 65$7. 25Tipped Minimum Wage
$14. 27$10. 62$2. 13Actual Tip Credit
$3. 02$3. 02$5. 12Wage Type
Denver Rates
Colorado Rates
Federal Rates
Minimum Wage
$17. 29$13. 65$7. 25Tipped Minimum Wage
$14. 27$10. 62$2. 13Actual Tip Credit
$3. 02$3. 02$5. 12Colorado State Income Tax (SIT) Rates
Colorado has a flat income tax rate of 4. 4%, meaning all residents pay the same amount regardless of their income levels
Additional Colorado SIT Details
Valid Filing Statuses
- S = Single or married claiming self
- M = Married claiming both spouses
- HOH = Head of Household
Exemptions
- Any services or individuals not subject to withholding under the Internal Revenue Code
- Nonresident military spouses
- Interstate carrier employees
- Nonresident services not in the course of an employer's business, of extremely short duration, or assigned on a variable basis so that an apportionment of income cannot be made
Form W-4
DR-0004Reconciliation Frequency
Annual
Additional Colorado SIT Details
Valid Filing Statuses
- S = Single or married claiming self
- M = Married claiming both spouses
- HOH = Head of Household
Exemptions
- Any services or individuals not subject to withholding under the Internal Revenue Code
- Nonresident military spouses
- Interstate carrier employees
- Nonresident services not in the course of an employer's business, of extremely short duration, or assigned on a variable basis so that an apportionment of income cannot be made
Form W-4
DR-0004Reconciliation Frequency
Annual
Colorado 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
Colorado SUI Tax Details
Taxable Wage Base
$20,400
Employee Subject to Tax
No
Rates for Experienced Employers
0. 75% - 10. 39%
Rates for New Employers
1. 70%
Effective Period
Calendar Year
Voluntary Contributions Allowed
Yes; must be made before March 15
Colorado SUI Tax Details
Taxable Wage Base
$20,400
Employee Subject to Tax
No
Rates for Experienced Employers
0. 75% - 10. 39%
Rates for New Employers
1. 70%
Effective Period
Calendar Year
Voluntary Contributions Allowed
Yes; must be made before March 15
Colorado State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. Colorado, however, doesn't require employers to collect an SDI tax
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)
Colorado doesn't require employers to collect PSL taxes, but the state does have the following program
Colorado PSL Details
Covered EmployeesAll employees in the stateAccrual Method(s)One hour for every 30 hours workedAnnual Accrual Maximum48 hoursCarryover Maximum48 hoursFAQHealthy Families and Workplaces Act (HFWA)Colorado PSL Details
Covered EmployeesAll employees in the stateAccrual Method(s)One hour for every 30 hours workedAnnual Accrual Maximum48 hoursCarryover Maximum48 hoursFAQHealthy Families and Workplaces Act (HFWA)Paid Family and Medical Leave (PFML) Taxes
Like SDI, Colorado’s Family and Medical Leave Insurance (FAMLI) program is a benefit funded via mandatory payroll deductions. Colorado’s program, however, won’t begin providing benefits until January 1, 2024
Colorado PFML Tax DetailsCovered EmployeesMost 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 EmployersAll 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 wages up to the federal wage base for social security taxes ($160,200 in 2023)
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
FAQsColorado PFML Tax DetailsCovered EmployeesMost 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 EmployersAll 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 wages up to the federal wage base for social security taxes ($160,200 in 2023)
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
FAQsNote, 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) 318-9100Online Registration
MyBizColorado RegistrationRegistration Form
Form CR 0100Form UITL-100Registration 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
Online and paper registration options are available
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
Employer Self-Service Login
MyUI Employer+ Login PageRegistration Details
Department of Revenue
Department of Labor & Employment
Phone
(303) 592-5920(303) 318-9100Online Registration
MyBizColorado RegistrationRegistration Form
Form CR 0100Form UITL-100Registration 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
Online and paper registration options are available
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
Employer Self-Service Login
MyUI Employer+ Login PageAdditional Colorado Payroll Tax Resources
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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