Payroll and Benefits Guide United States – Colorado
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 0.81% – 5.2% | State Unemployment Insurance (SUI), applied for positive rated employers.The rate depends on the employer’s experience rating, which is influenced by their history of layoffs and unemployment claims. |
| 6.695% – 12.34% | State Unemployment Insurance (SUI), applied for negative rated employers.The rate depends on the employer’s experience rating, which is influenced by their history of layoffs and unemployment claims. |
| 3.05% | State Unemployment Insurance – New Employer. This rate includes a base rate, support rate and solvency surcharge. |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.
An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 0.60% – 6.00% | Federal Unemployment Tax Act (FUTA), applied on salary up to 7,000 USD per year.Employers who pay their state unemployment tax in full and on time are eligible for a 5.4% tax credit, reducing the FUTA rate to 0.6%. |
| 12.11% – 29.04% | Total Employment Cost |
| Employee Payroll Contributions | |
| 6.20% | Federal Insurance Contributions Act (FICA) - Social Security, applied on salary up to 176,100 USD per year. |
| 1.45% | Federal Insurance Contributions Act (FICA) – Medicare.An additional 0.9% should be withheld from employees earning above 200,000 USD per year. |
| 7.65% – 8.55% | Total Employee Cost |
| State Employee Income Tax | Annual |
| 4.25% | Flat Tax Rate |
| Federal Employee Income Tax | Annual |
| Federal Tax – Singles | |
| 10.00% | Up to 11,925 USD |
| 12.00% | 11,925 – 48,475 USD |
| 22.00% | 448,475 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,525 USD |
| 35.00% | 250,525 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Federal Tax – Married – Joint Filing | |
| 0.00% | Up to 23,850 USD |
| 12.00% | 23,850 – 96,950 USD |
| 22.00% | 96,950 – 206,700 USD |
| 24.00% | 206,700 – 394,600 USD |
| 32.00% | 394,600 – 501,050 USD |
| 35.00% | 501,050 – 751,600 USD |
| 37.00% | Above 751,600 USD |
| Federal Tax – Heads of Household | |
| 10.00% | Up to 17,000 USD |
| 12.00% | 17,000 – 64,850 USD |
| 22.00% | 64,850 – 103,350 USD |
| 24.00% | 103,350 – 197,300 USD |
| 32.00% | 197,300 – 250,500 USD |
| 35.00% | 250,500 – 626,350 USD |
| 37.00% | Above 626,350 USD |
| Standard Deduction and Personal Exemption | |
| 15,000 USD | Single |
| 30,000 USD | Married Filing Jointly |
| 22,500 USD | Head of Household |
Minimum Wage
General
The minimum wage in Colorado is 14.81 USD per hour.
The Federal minimum wage rate is 7.25 USD per hour.
Payroll
Payroll Cycle
Employees are paid semi-monthly and monthly.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
In Colorado, the workweek is a maximum of 40 hours per week or 8 hours per day.
Overtime
Colorado adheres to the Fair Labor Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay.
If employees are scheduled to work on weekends or rest days, no additional payment is required.
However, should an employer request an employee to work in exceptional circumstances on these days, then overtime is paid at the rate of 150% of the regular pay.
Leave
Annual Leave (vacation)
Colorado does not have any state laws that govern paid time off. However, it is common for employers to decide whether to offer paid or unpaid vacation leave.
This must comply with employment law and must be stipulated in the collective bargaining agreements.
Public Holidays
Public holidays are not mandatory paid days off, but employers commonly allow workers to take federal holidays as paid days off.
Some companies might also agree to allow workers to take off state holidays; workers can find specific state holiday dates from their local government.
Usually when an agreed public holiday falls on a weekend, a day off in lieu is given on the Friday before or the Monday after the holiday.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 19 January 2026 | Monday | Martin Luther King, Jr.’s Birthday | Standard holiday |
| 16 February 2026 | Monday | Washington’s Birthday (Presidents’ Day) | Standard holiday |
| 31 March 2026 | Tuesday | César Chávez Day | |
| 25 May 2026 | Monday | Memorial Day | Standard holiday |
| 19 June 2026 | Friday | Juneteenth | Standard holiday |
| 3 July 2026 | Friday | Independence Day Observed | Standard holiday |
| 7 September 2026 | Monday | Labor Day | Standard holiday |
| 5 October 2026 | Monday | Frances Xavier Cabrini Day | |
| 11 November 2026 | Wednesday | Veterans Day | Standard holiday |
| 26 November 2026 | Thursday | Thanksgiving Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Sick Days
It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).
Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
- Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- Care for the employee’s spouse, child, or parent who has a severe health condition.
- Leave in the event of a serious health condition that makes the employee unable to perform the essential functions of their job.
- Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
Or
- 26 working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
In addition to the FMLA, employers with more than 16 employees must provide one hour of paid sick leave for every 30 hours worked, up to a maximum of 48 hours of paid sick leave.
In addition to the Family and Medical Leave Act (FMLA) and the Pregnancy Discrimination Act, Colorado also has the Colorado Pregnant Workers Fairness Act.
This act requires employers to provide pregnant employees with modified work environments, including longer breaks, light-duty, job restructuring, modification of equipment (including seating), etc.
Colorado’s Adoptive Parents Leave states employers must provide the same rights regarding maternity and paternity leave for both biological and adoptive parents, including any other employment benefits such as job protection and salary rates of pay.
Maternity Leave
Maternity leave falls under the FMLA and Pregnancy Discrimination Act (see Sick Leave).
Paternity Leave
Paternity leave may fall under FMLA (see Sick Leave).
Parental Leave
Parental leave falls under the FMLA and Colorado’s Adoptive Parents Leave (see Sick Leave).
Other Leave
- Jury Duty: Full-time, regular employees are entitled to job-protected, paid leave for the first 3 days of jury duty at the rate of 50.00 USD per day (this can be more if stipulated in the contract). Employees must provide a copy of the jury summons to the employer. An employee is not entitled to compensation for time spent as a witness in a case, responding to a subpoena, or acting as a plaintiff or defendant in the courts.
- Voting Leave: Employees who are registered to vote must be allowed up to two hours of paid leave to vote in any municipal, county, state, or federal primary or general election. Employees must provide reasonable notice to their employers to take time off to vote.
- In addition to the federal law USERRA, Colorado law provides protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the public health service, and any other category of persons designated by the president in a time of war or emergency. Colorado law provides up to 15 days of unpaid leave per year to members of the National Guard or the U.S. armed forces to attend military training. These members also have reinstatement rights to their former positions if they are still qualified and have satisfactorily completed the training.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated “at will.”
This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds.
In such cases, the parties negotiate the foundations for a “just cause” termination.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Wages must be paid for regular pay-periods of no greater duration than one calendar month or 30 days (whichever is longer), and on regular paydays no later than 10 days following the close of each pay period. |
|
Payment may be made by cash, check payable on demand, direct deposit (with employee’s authorization) or payroll card (if employee has access to full wages each pay period and can choose another method). The law does not require only bank account payment in all cases. |
Notice Period
In Colorado, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. The payment of accrued, unused vacation or PTO upon termination is mandatory in Colorado. However unpaid sick leave doesn’t have to be paid.
While there is no notice period, general practice is 2 weeks.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.
Severance Pay
Except as otherwise provided in an employment contract or collective bargaining agreement, employers need not make severance payments to terminated employees.
Many employers choose to offer severance pay based on the length of employment.
Probation Period
There are no provisions in the law regarding probation or trial periods. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.
Minimal Statutory Termination Costs
Some states require PTO balances to be paid out during termination, also any bonuses or commissions that were promised in the employment contract
Immigration
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States.
An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement).
To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request; the types of visas include:
- H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
- 0 – for people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – members of certain immigrant groups.
- E-5 – immigrant investors in US companies (substantial investment).
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States.
The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorized to work in the United States.
VAT
General
Colorado has a State sales tax of 2.9%. Additionally, Local state taxes can be applied up to an additional 8.3%.
Stay up to date on payroll & employment law changes
Version History
Payroll contributions and personal income tax rates have been updated.
Income Tax: Colorado’s flat tax drops to 4.55%.
SUTA State Unemployment Tax: Changed to 0.71% – 9.64%.
Sick leave: Employers with 16 employees or more must provide 1 hour of sick leave for every 30 worked, up to a maximum of 48 hours of sick leave.
See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws
Payroll and Benefits Guide
in United States – Colorado
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 19 January 2026 | Monday | Martin Luther King, Jr.’s Birthday | Standard holiday |
| 16 February 2026 | Monday | Washington’s Birthday (Presidents’ Day) | Standard holiday |
| 31 March 2026 | Tuesday | César Chávez Day | |
| 25 May 2026 | Monday | Memorial Day | Standard holiday |
| 19 June 2026 | Friday | Juneteenth | Standard holiday |
| 3 July 2026 | Friday | Independence Day Observed | Standard holiday |
| 7 September 2026 | Monday | Labor Day | Standard holiday |
| 5 October 2026 | Monday | Frances Xavier Cabrini Day | |
| 11 November 2026 | Wednesday | Veterans Day | Standard holiday |
| 26 November 2026 | Thursday | Thanksgiving Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
Questions & Answers