Comprehensive Guide to Maine Payroll Taxes

Navigating payroll taxes in Maine involves understanding both federal and state tax obligations. This guide provides employers in Maine with a structured and detailed overview of the payroll taxes applicable in Maine, outlining regulations and requirements to ensure compliant payroll withholding.

Overview of Payroll Taxes in Maine

Employers in Maine are responsible for managing several types of payroll taxes, including federal income tax, FICA taxes (Medicare and Social Security), and state payroll taxes. Maine does not impose additional local payroll taxes. Nonprofit organizations are subject to payroll taxes even if they are otherwise tax-exempt.

Paying unemployment insurance

Employers in Maine are responsible for paying unemployment insurance (UI) tax on behalf of their workers. UI, also known as the state unemployment insurance (SUI) tax, is a national program that provides temporary payments to eligible workers who become unemployed through no fault of their own.

Maine employers are charged UI at a rate between 0.28% and 6.03% on a taxable wage base of $12,000 per employee. New employers are taxed UI at 2.32%.

Unemployment insurance payments are due quarterly on April 30, July 31, October 31, and January 31. The Maine Department of Labor (MDOL) administers unemployment insurance and provides the ReEmployME online portal and resources that make paying UI efficient for employers. Alternatively, employers can mail the UC-1 form and payment to the Maine Department of Labor. Late filing may incur a penalty fee.

Employers can get further guidance on paying unemployment insurance on The Maine Department of Labor website.

Withholding personal income tax from your Maine employee

In addition to Unemployment Insurance, your responsibility is also to withhold Personal Income Tax (PIT) from your employees' wages, then remit it to the state.

Personal Income Tax, also known as individual income tax or state income tax, is a tax on the income of Maine employees. Employees are charged PIT on their full wage at a rate of 5.8% to 7.15%. Maine employers are responsible for withholding this amount from employees' wages and remitting it to the state.

You can file and pay withheld PIT through Maine's online portal. You can also pay electronically via ACH debit or EFT with ACH credit.

Maine Revenue Services (MRS) oversees personal income tax, and can audit tax returns as well as the IRS. The Maine Department of Administrative and Financial Services provides further guidance to help you remain compliant on their FAQ page.

Paying Workers' Compensation in Maine

Businesses in Maine with one or more employees are required to pay for Workers' Compensation insurance, although some exemptions apply. Workers' Compensation is a form of insurance that provides coverage for an employee's injuries or illnesses that occur while they are performing their job duties.

To ensure compliance with Maine's regulations, employers must secure Workers' Compensation coverage from a qualified commercial carrier within the state. To find a qualified commercial carrier and obtain the necessary Workers' Compensation insurance, the Maine Workers' Compensation Board offers valuable resources on their official website.

Simplify US Payroll Tax Compliance with Deel

While this article provides essential information on Maine state payroll and unemployment taxes, payroll compliance and state requirements can be complex and may extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel.

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. By leveraging Deel's expertise, businesses can optimize their US payroll processes and ensure compliance with state and federal regulations.

For more information, speak with a Deel expert to explore how our services can benefit your organization.