Colorado Tax Guide for Employers (2026) 

Colorado keeps things relatively straightforward with a flat state income tax rate. The state also has a Paid Family and Medical Leave Insurance (FAMLI) program that both employers and employees contribute to. 

Colorado imposes a flat state income tax rate of 4.40% for 2026 on all taxable wages. The state accepts either the federal W-4 or Colorado’s own DR 0004 form. Withholding is calculated by annualizing wages, applying the annual withholding allowance, and multiplying the taxable amount by the flat rate. Results are rounded to the nearest dollar. 

Colorado supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 4.40%. 

Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 1.7%. 

Colorado requires contributions to Colorado FAMLI (Paid Family and Medical Leave). Both employer and/or employee contributions may apply. Verify the current rates and requirements at https://tax.colorado.gov/withholding.

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

1. Obtain your Federal EIN at irs.gov
2. Register with the Colorado Department of Revenue at colorado.gov/revenue
3. Register for SUTA and FAMLI with Colorado CDLE at cdle.colorado.gov
4. Employees may use the federal W-4 or complete DR 0004 for Colorado-specific adjustments
5. Submit a Netchex tax team request to enable Colorado SIT, SUTA, and FAMLI
6. Have each employee complete their tax forms with an automated onboarding task in Netchex, digitally storing tax forms
7. Configure any additional tax settings in the employee profile

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

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

Note: Deadlines are subject to change. Always confirm current requirements directly with Colorado Department of Revenue at https://tax.colorado.gov/withholding. 

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

• Colorado Department of Revenue
• Colorado DR 0004 Form
• Colorado FAMLI Program

Does Colorado have its own withholding form? 

Colorado generally accepts the federal W-4. Employees needing Colorado-specific exemptions may complete the DR 0004. 

Does Colorado have a Paid Family Leave program? 

Yes. Colorado’s FAMLI program requires both employer and employee contributions starting in 2023. Verify rates at comadfamli.com. 

What is Colorado’s SUTA wage base? 

Colorado’s SUTA wage base is $23,800 per employee per year (2025). Verify at cdle.colorado.gov. 

What is Colorado’s flat income tax rate? 

Colorado’s flat income tax rate is 4.4%. 

Does Colorado have local payroll taxes? 

Some Colorado municipalities impose local occupational privilege taxes (OPT), including Denver and Aurora.