Overview
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.
State Income Tax (SIT)
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.
| Tax Structure | Flat rate: 4.40% for 2026 |
| State Withholding Form | Federal W-4 or Colorado DR 0004 |
| Filing Statuses | S, M, MH, H |
| Rounding | Nearest whole dollar |
| FAMLI | Paid Family and Medical Leave Insurance applies |
Supplemental Wages
Colorado supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 4.40%.
Employer State Unemployment Tax (SUTA)
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%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 1.7% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Paid Family Leave Insurance: Colorado has a paid family leave program that provides wage replacement benefits for qualifying family and medical events. Both employers and employees may be required to contribute, depending on the program’s structure.
Disclaimer: This content is provided for general informational purposes only and does not constitute legal, tax, or accounting advice. Netchex does not provide tax or legal guidance and makes no representations regarding the accuracy or applicability of this information. Laws and regulations may change. The information on this page reflects payroll tax guidelines as of March 2026. For the most current requirements, please refer to: Colorado Department of Revenue
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