Payroll tax in Connecticut: What employers need to know [Updated 2026]
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Running a business in Connecticut? As an employer, you have a great many responsibilities, not least of which is taxes. Dealing with this obligation can be daunting: In addition to federal income tax and the FICA taxes levied by the IRS, which include Medicare and Social Security contributions, business owners are also responsible for state payroll taxes. To make matters more complicated, regulations vary across states in the US. It's crucial to understand the tax laws in the states where your employees live so you can avoid penalties.
In the 1990s, the state of Connecticut switched from a flat-rate tax system to a progressive one, which has added complexity for employers. With a progressive tax system, the more your employees earn, the higher their taxes. Similarly, if your company is growing and you're adding new hires, your employer tax contributions will increase, as will the amount you withhold from each employee's paycheck.
Whether you're running a small business or a global company, if you have employees in the state of Connecticut, you need a keen understanding of Connecticut payroll taxes, their rates, and who owes what, as well as the deadlines. In this 2026 guide, we'll review all of that and more.
The 3 Connecticut payroll taxes
The Connecticut Department of Revenue Services (DRS), the Connecticut Department of Labor (CTDOL), and the CT Paid Leave Authority are all responsible for administering payroll taxes at the state level. Under the state's new hire reporting requirements, all employers must report new hires within 20 days of that worker's start date, and they must fill out and send a CT-W4 form for each employee to the DRS.
There are three Connecticut payroll taxes. We'll go over each one in more detail here.
State unemployment insurance tax
Connecticut's state unemployment insurance (SUI) tax is collected to fund unemployment benefits for employees who have lost their jobs due to circumstances beyond their control, such as layoffs. The Connecticut Department of Labor both collects SUI tax and determines the tax rates annually. In 2026, Connecticut's SUI taxable wage base is $25,000 per employee. New employers pay approximately 2.5% for about three years, after which the CTDOL assigns them an experience rate and a new tax rate ranging from 1.9% to 6.8%.
Under the Federal Unemployment Tax Act (FUTA), Connecticut employers typically must also contribute to federal unemployment taxes as well as state ones.
Who pays | Employer |
|---|---|
Tax rate | 1.9% to 6.8% (experienced employers) New employers: approximately 2.5% for first 3 years |
Taxable wage limit | First $25,000 per employee per year (2026) |
Maximum tax | $1,700 (6.8% × $25,000) |
Paid Family and Medical Leave Tax
The state Paid Family and Medical Leave Act (PFMLA) provides temporary financial relief to eligible employees who need to take time off from work to care for a sick or injured family member or to attend to their own health. This tax program is administered by the CT Paid Leave Authority. Employers must withhold 0.5% of each employee's wages, up to the federal Social Security wage base (adjusted annually — $176,100 in 2025, with the 2026 amount to be confirmed). The PFMLA contribution rate is unchanged at 0.5% for 2026, and the maximum weekly benefit increased to $1,016.40 as of January 1, 2026.
Who pays | Employee (withheld by employer) |
|---|---|
Tax rate | 0.5% (unchanged for 2026) |
Taxable wage limit | Up to the annual Social Security wage base ($176,100 in 2025; adjusts each year) |
Maximum tax | $880.50 per employee per year (0.5% × $176,100) |
Connecticut income tax
In addition to federal income tax, Connecticut residents are on the hook for state income tax. Employers are required to withhold the correct amount from each employee's paycheck. The DRS manages the reporting, collection, and enforcement of state income tax, and the tax rates are based on employees' CT-W4 forms.
Who pays | Employee |
|---|---|
Tax rate | 3% to 6.99% (2026 progressive rate) |
Taxable wage limit | No limit |
Maximum tax | No maximum |
In 2026, Connecticut's progressive income tax rates range from 3% to 6.99% of an employee's wages. How much each person pays is based on the amount they make and their filing status.
Navigating payroll tax laws can be challenging. This is especially true in Connecticut, with its complex progressive state income tax system and three types of payroll taxes. Rippling's payroll compliance software makes it easy. Rippling automatically calculates your taxes and submits your tax forms and payments on your behalf—monitoring tax laws at the federal and Connecticut state levels to ensure total compliance. Rippling's PEO takes it a step further: It can register and maintain your state tax accounts for you, automating even more of the payroll tax process.
Payroll tax due dates in Connecticut
Connecticut employers must pay SUI taxes to the Connecticut Department of Labor—not the DRS—each quarter. The deadlines are as follows:
First quarter (January-March): Due April 30
Second quarter (April-June): Due July 31
Third quarter (July-September): Due October 31
Fourth quarter (October-December): Due January 31
If one of these dates falls on a weekend or a legally recognized holiday, you must complete your tax filing responsibilities by the following business day.
PFMLA tax withholdings must be remitted to the CT Paid Leave Authority quarterly as well. The deadlines are the same as those for SUI taxes.
How to submit payroll taxes in Connecticut
We've covered the types of payroll taxes you're responsible for and the due dates. In the state of Connecticut, as in many other states, tax filing is mostly done online. Let's go over how to submit your taxes.
Enroll in e-Services
For employers who are looking for a quick, simple, and secure way to manage payroll taxes, their best bet is to visit the website of the agency that collects those taxes. The CT Paid Leave Authority has an online portal to remit contributions, as does the CTDOL. For all other taxes that are paid to the DRS, visit portal.ct.gov. Each site has instructions about how to set up an account and make your payments, as well as answers to FAQs.
Rippling's full-service payroll software
Looking for an even easier payment option? Rippling's payroll software is so powerful it practically runs itself. Rippling automates all your compliance work—automatically tracking the annual PFMLA wage cap and SUI rate changes—and files your federal and Connecticut state payroll taxes at the right time with the IRS and the Connecticut Department of Revenue Services.
Frequently Asked Questions
Are there local tax laws in Connecticut?
No. Connecticut does not permit municipalities to levy local income taxes, making it one of the few states where employers have no local payroll tax withholding obligations at all. All Connecticut payroll taxes are administered at the state level: the SUI tax (taxable wage base $25,000 in 2026), the state income tax withholding (3%–6.99% progressive), and the Paid Family and Medical Leave contribution (0.5% of wages up to the Social Security wage base). Employers do not need to register with or remit to any municipal tax authority in Connecticut.
What is Connecticut's PFML contribution rate for 2026?
Connecticut’s Paid Family and Medical Leave (PFML) contribution rate is 0.5% of each employee’s wages in 2026, unchanged from 2025. This is an employee-paid contribution—employers are not required to pay the PFML premium (though they may choose to cover some or all of it). The 0.5% applies on wages up to the federal Social Security wage base, adjusted annually. Employers must withhold the contribution from employee paychecks and remit it quarterly to the CT Paid Leave Authority. As of January 1, 2026, the maximum weekly PFML benefit increased to $1,016.40. Employers who offer an approved private plan may be exempt from the state program.
Are nonprofit organizations subject to payroll taxes in Connecticut?
Yes, most nonprofits are responsible for remitting payroll taxes in the state of Connecticut. However, nonprofits that qualify for an exemption under Section 501(c)(3) of the Internal Revenue Code (IRC) can decide how they want to pay for their UI costs. They have two options: Pay the same UI taxes as commercial businesses or reimburse the Connecticut Department of Labor for the full cost of the UI benefits paid to their former workers.
Disclaimer
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
Author
Vanessa Kahkesh
Content Marketing Manager, HR
Vanessa Kahkesh is a content marketer for HR passionate about shaping conversations at the intersection of people, strategy, and workplace culture. At Rippling, she leads the creation of HR-focused content. Vanessa honed her marketing, storytelling, and growth skills through roles in product marketing, community-building, and startup ventures. She worked on the product marketing team at Replit and was the founder of STUDENTpreneurs, a global community platform for student founders. Her multidisciplinary experience — combining narrative, brand, and operations — gives her a unique lens into HR content: she effectively bridges the technical side of HR with the human stories behind them.
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