Overview
Massachusetts uses a flat income tax rate with an additional surtax on high earners. The state is unique in that the SIT calculation requires FICA and Medicare amounts to be computed first, as these are used as deductions in the Massachusetts withholding formula.
State Income Tax (SIT)
Massachusetts imposes a flat state income tax rate of 5% for 2026, plus a 4% surtax on income exceeding $1,107,750. The withholding calculation is unique because it requires federal FICA and Medicare to be set up simultaneously—the state deducts Social Security and Medicare contributions from gross wages before calculating the state tax. Massachusetts also has a Paid Family and Medical Leave (PFML) program.
| Tax Structure | Flat 5% + 4% surtax on income over $1,107,750 |
| State Withholding Form | Form M-4 (references Circular M) |
| Special Requirement | FICA/Medicare must be calculated simultaneously |
| PFML | Paid Family and Medical Leave program |
| Supplemental Rate | 5% |
Supplemental Wages
Massachusetts supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 5%.
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 1.87%.
| Tax Type | Employer-paid only |
| Default New Employer Rate | 1.87% |
| Rate Assignment | Experience-rated; assigned annually by the state |
Other Taxes & Obligations
Paid Family Leave Insurance: Massachusetts 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:
Official reference:Massachusetts Department of Revenue
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