If you run a business in Colorado, you’ve probably heard of the new Paid Family and Medical Leave Insurance (FAMLI) program. But here’s the kicker:
You’re probably paying for part of it—and you might not have to.
Many employers don’t realize that FAMLI is jointly funded by employees and employers, and you’re allowed to withhold the employee’s share directly from their paycheck. But some payroll providers don’t tell you that—or worse, set it up incorrectly.
Let’s break it down.
What Is Colorado FAMLI?
FAMLI provides up to 12 weeks of paid, job-protected leave for employees who:
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Bond with a new child
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Care for a loved one with a serious health condition
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Recover from their own serious health issue
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Handle needs due to a family member’s military deployment
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Address safety concerns from domestic violence or sexual assault
An additional 4 weeks may be available for pregnancy or childbirth complications.
It’s a great benefit—but you don’t need to shoulder the cost alone.
How It’s Funded
In 2025, Colorado’s FAMLI program is funded by a 0.9% payroll tax, split evenly between employer and employee:
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0.45% withheld from the employee’s paycheck
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0.45% paid by the employer
If you have fewer than 10 employees, you’re not required to pay the employer portion—but you can still withhold the employee portion to stay compliant.
If you’re not withholding that 0.45% from employee paychecks, you’re overpaying.
The Problem with Some Payroll Providers
We’ve seen too many payroll companies:
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Skip the employee deduction altogether
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Miscalculate the employer share
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Or fail to track FAMLI separately from other taxes
And when that happens? You’re either out of compliance, overpaying, or both.
Why This Matters (Especially in Colorado)
Colorado’s new FAMLI program comes with detailed reporting requirements and enforcement starting in 2025. If your payroll isn’t set up the right way:
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You could get hit with penalties
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You could pay thousands more than you need to
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Your employees might not be eligible for benefits if contributions aren’t reported correctly
Baron Payroll Sets It Up the Right Way
When you work with Baron Payroll, here’s what you can expect:
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Accurate FAMLI setup from day one
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Automatic withholding of the employee’s share
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Clear, compliant pay stub reporting
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Transparent guidance so you know what you’re paying and why
And most importantly, you stay in control of your money.
Should You Be Withholding FAMLI in Colorado?
If your payroll company never mentioned that employees are supposed to fund half of Colorado’s Paid Family Leave program… that’s a red flag.
You could be paying more than you should—and that adds up fast.
Want to see how much you could be saving?
👉 Use our instant price calculator — no sales call required.
Or visit https://www.baronpayroll.com/itin-service to learn more.
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