New Payroll Tax Begins Tuesday In Massachusetts

Your paycheck could be subject to a new tax beginning Tuesday to fund a new state family and medical leave program that starts next year.

The $800 million program allows employees to take up to 12 weeks to care for a sick family member or new baby or when a loved one is deployed in active military duty, and up to 20 weeks of paid leave for someone's own medical needs or care for a sick or injured service member.

Benefits for caring for a new child or sick service member or dealing with one's own illness will begin the Jan. 1, 2021. Benefits for caring for sick family members will begin July 1, 2021.

Companies will pay a 0.75 percent payroll tax, which starts Tuesday. Employees won't pay more than 38 cents on every $100, according to state officials. See how much you could pay here.

The new law was part of the "grand bargain" bill signed by Gov. Charlie Baker last summer, avoiding several ballot questions that included a proposed millionaire's tax while instituting an eventual $15 minimum raise and implement the guaranteed paid family and medical leave program.

"The paid leave legislation passed by the Legislature is a historic victory for millions of Massachusetts workers who will be able to take job-protected paid time off from work to take care of themselves or a family member after a medical emergency or the birth or adoption of a new child," RaiseUp Massachusetts, which advocated for the legislation.

Companies that already offer paid leave that is equal to or better the state's offer can opt out of the new program.

Businesses with less than 25 people won't have to pay into the fund.