Colorado FAMLI Payroll Requirements: What Employers Need to Know

What Is Colorado FAMLI?

The Colorado Family and Medical Leave Insurance (FAMLI) program provides paid leave benefits to eligible Colorado workers. Signed into law in 2020 and effective January 2024, FAMLI requires most Colorado employers to participate in the program through payroll deductions and employer contributions.

FAMLI allows eligible employees to take up to 12 weeks of paid leave for qualifying reasons, including bonding with a new child, caring for a family member with a serious health condition, or addressing needs related to a family member's military deployment.

Which Employers Are Affected?

Nearly all Colorado employers are affected by FAMLI, but the requirements differ based on size:

Employers with 10+ employees: Must pay the employer portion of FAMLI premiums and deduct the employee portion from wages.
Employers with fewer than 10 employees: Must deduct and remit the employee portion but are not required to pay the employer share (though they may opt in).
Self-employed individuals: May opt into the program voluntarily.

There are limited exceptions for certain local government entities that have approved equivalent plans, but the vast majority of Colorado businesses must participate.

Employee vs. Employer Contributions

FAMLI is funded through a premium split between employers and employees. The rate is set annually by the FAMLI Division — for 2026:

Total premium rate: 0.88% of employee wages
Employee share: 0.44% of wages (deducted from paychecks)
Employer share: 0.44% of wages (paid by the employer)

For employers with fewer than 10 employees, only the employee share (0.44%) is required. The employer share is optional, though some small employers opt in as a benefit.

Premiums are calculated on wages up to the Social Security wage base for the year. Wages above that threshold are not subject to FAMLI premiums.

Don't miss the February 28 headcount deadline

Each year, employers must update their total employee headcount in My FAMLI+ by February 28. If you don't, the FAMLI Division assumes you have 10 or more employees and will bill you the full premium every quarter that year — even if you actually qualify for the small-employer exemption. This is one of the easiest avoidable penalties in the program.

How to Set Up FAMLI Deductions

Setting up FAMLI correctly in your payroll system involves several steps:

Register with the FAMLI Division

Before you can report and remit premiums, you need to register your business with the Colorado FAMLI Division through their online portal. You will need your Colorado employer account number and basic business information.

Configure Payroll Deductions

Your payroll system needs to calculate and withhold the employee share of FAMLI premiums from each paycheck. This should be set up as a separate deduction — not combined with other taxes or withholdings.

Track and Remit Premiums

Premiums are reported and paid quarterly through the FAMLI system. Your quarterly reports must include employee wage information and the total premiums due for both the employee and employer portions.

Update Employee Communications

Employees should be informed about FAMLI deductions appearing on their pay stubs. The deduction should be clearly labeled so employees understand what it is.

Reporting Requirements and Deadlines

FAMLI premiums are reported and paid on a quarterly basis:

Q1 (Jan-Mar): Due April 30
Q2 (Apr-Jun): Due July 31
Q3 (Jul-Sep): Due October 31
Q4 (Oct-Dec): Due January 31

Late filings may result in penalties and interest. It is critical to submit accurate reports on time every quarter.

Common FAMLI Mistakes to Avoid

We see several recurring mistakes when businesses try to set up FAMLI on their own:

Wrong premium rate: Using an outdated rate or calculating on the wrong wage base.
Missing the employer share: Small employers sometimes forget they are still responsible for the employee portion even if they are exempt from the employer share.
Not registering: Some employers assume their payroll software handles registration automatically. It does not.
Incorrect reporting: Reporting wages incorrectly or missing employees on quarterly filings.
Not updating for new hires: Failing to add new employees to FAMLI deductions promptly.
Confusing FAMLI with FMLA: FAMLI and FMLA are different programs with different requirements.

How FAMLI Interacts with Other Leave

FAMLI does not replace existing leave policies — it adds to them. Here is how it interacts with common leave types:

FMLA: FAMLI leave can run concurrently with FMLA leave if the employee qualifies for both.
Employer-provided PTO: Employers may require or allow employees to use employer-provided paid leave concurrently with FAMLI benefits.
Short-term disability: FAMLI and STD may overlap, but combined benefits are subject to wage-replacement limits — coordinate with your STD carrier so employees aren't overpaid.

Key Takeaways

FAMLI affects nearly all Colorado employers
Premiums are 0.88% of wages in 2026, split equally between employer and employee
Employers with fewer than 10 employees only pay the employee share
Update headcount in My FAMLI+ by February 28 each year to avoid being billed at the full-employer rate
Quarterly reporting and payment are required with specific deadlines
Common mistakes include wrong rates, missed registration, and incorrect reporting
FAMLI runs alongside (not instead of) FMLA and employer PTO policies

Need help setting up FAMLI in your payroll system? Our team configures FAMLI for Colorado businesses every day. We will make sure your deductions are correct, your reporting is on time, and your employees are properly informed.