Maryland Tax Guide for Employers (2026) 

Maryland is unique in how it handles state and county taxes. The state and local (county) withholding amounts are combined and reported together as the Maryland State Tax. Every Maryland employer must withhold both state and county taxes, and the combined amount is remitted to the state. 

Maryland uses a progressive state income tax with county taxes that are combined with the state amount. Employees complete Form MW507 to specify their filing status. The combined state and county calculation is reported as a single Maryland State Tax amount. Maryland also has a reciprocal agreement with Pennsylvania, and a special exemption for PA residents. 

Maryland supports the following supplemental calculation methods. Supplemental wages such as bonuses and commissions will be calculated using the applicable method. 

Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 2.3%. 

Maryland requires contributions to Maryland FAMLI (Time to Care Act). Both employer and/or employee contributions may apply. Verify the current rates and requirements at https://www.marylandtaxes.gov/business/income/withholding/. 

Every Maryland county and Baltimore City imposes a local income tax ranging from 2.25% to 3.2%. Maryland employers must withhold both state and county income tax.

Follow these steps to begin withholding Maryland payroll taxes for your employees: 

1. Obtain your Federal EIN at irs.gov
2. Register with the Maryland Comptroller at interactive.marylandtaxes.gov
3. Register for SUTA with the Maryland Department of Labor at dllr.state.md.us
4. Submit a Netchex tax team request to enable Maryland SIT, county taxes, and SUTA
5. Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
6. Configure any additional tax settings in the employee profile

Once setup is complete in Netchex, the system will automatically calculate, withhold, and remit all Maryland payroll taxes on your behalf. 

The following are general filing and deposit deadlines for Maryland payroll taxes. Deadlines may vary based on your employer size and deposit frequency. Always verify current schedules at Comptroller of Maryland. 

Note: Deadlines are subject to change. Always confirm current requirements directly with Comptroller of Maryland at https://www.marylandtaxes.gov/business/income/withholding/. 

The following official resources will help you stay current on Maryland payroll tax requirements: 

• Comptroller of Maryland
• Maryland Comptroller — Withholding
• Maryland County Tax Rates

Does Maryland have county income taxes? 

Yes. Every Maryland county and Baltimore City imposes a local income tax. Rates range from 2.25% to 3.2% depending on the county. 

What form do Maryland employees complete? 

Employees complete Maryland Form MW507, Employee’s Maryland Withholding Exemption Certificate. 

What is Maryland’s SUTA wage base? 

Maryland’s SUTA wage base is $8,500 per employee per year. Verify at dllr.state.md.us. 

What is Maryland’s state income tax rate? 

Maryland’s state income tax ranges from 2% to 5.75% depending on income level. 

Does Maryland have a Paid Family Leave program? 

Yes. Maryland’s Time to Care Act (FAMLI) requires contributions starting in 2025. Verify rates at mdpaid leave.com.