Payroll and Benefits Guide United States – Minnesota
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
| 0.40% – 8.90% | State Unemployment Insurance (SUI), applied for positive rated employers on the first 43,000 USD of each employee’s wages.The rates are determined based on the employer’s experience with unemployment claims and contributions.
A 5% surcharge will be applied to all employers to ensure the solvency of the UI Trust Fund |
| 1.00% – 8.90% | State Unemployment Insurance (SUI), applied for negative rated employers on a taxable wage base of 43,000 USD.
The rate is dependent on the industry. |
| 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%. |
| 9.55% – 36.45% | 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 |
| State Tax – Single | |
| 5.35% | 0 – 32,570 USD |
| 6.80% | 32,570 – 106,990 USD |
| 7.85% | 106,990 – 198,630 USD |
| 9.85% | Above 198,630 USD |
| State Tax – Married – Joint Filing | |
| 5.35% | 0 – 47,620 USD |
| 6.80% | 47,620 – 189,180 USD |
| 7.85% | 189,180 – 330,410 USD |
| 9.85% | Above 330,410 USD |
| Standard Deduction and Personal Exemption | |
| Single | 14,950 USD |
| Married – Joint Filing | 29,900 USD |
| Head of Household | 22,500 USD |
| Personal exemption | |
| Dependent | 5,200 USD |
| 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
Minnesota has a state minimum wage of 11.13 USD per hour.
The Federal minimum wage rate is 7.25 USD per hour.
Payroll
Payroll Cycle
In general, employees in Minnesota are paid either semi-monthly or monthly, with payments on set dates as stipulated in the employee contract.
13th Salary
There is no legislation for 13th-month payments in Minnesota.
Working Hours
General
In Minnesota, the standard working week is a maximum of 40 hours per week, 8 hours per day.
Overtime
Minnesota adheres to the Fair Labor Standards Act (FLSA), with overtime paid when employees work more than 40 hours in a single working week.
The employer must pay 150% of the regular salary for the extra hours worked. Similarly, 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 will be payable at 150% of the regular salary rate for the extra hours worked.
The Wage and Hour Division (WHD) of the Department of Labor (DOL) is responsible for the administration and enforcement of the FLSA.
Leave
Annual Leave (vacation)
Minnesota does not have any state statute governing the amount and payment of vacation time, however, it is common for employers to offer paid vacation leave.
This must comply with employment law and be stipulated in the employment agreement or collective bargaining agreement.
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 Jan 2025 | Wednesday | New Year’s Day | |
| 20 Jan 2025 | Monday | Martin Luther King Jr. Day | |
| 17 Feb 2025 | Monday | Presidents Day | |
| 26 May 2025 | Monday | Memorial Day | |
| 19 Jun 2025 | Thursday | Juneteenth | |
| 4 Jul 2025 | Friday | Independence Day | |
| 1 Sep 2025 | Monday | Labor Day | |
| 13 Oct 2025 | Monday | Columbus Day | |
| 11 Nov 2025 | Tuesday | Veterans Day (applicable to veterans and active military only) | |
| 27 Nov 2025 | Thursday | Thanksgiving Day | |
| 28 Nov 2025 | Friday | Day After Thanksgiving | |
| 25 Dec 2025 | Thursday | Christmas Day |
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 specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).
In addition, the Minnesota Paid Sick and Safe Leave Laws apply to all employers who work in Duluth with five or more employees.
This includes employees who work for the employer but outside the city. Employers are required to give 1 hour paid leave for every 50 hours worked, with a maximum of 64 hours for the year.
Employees are allowed to use a maximum of 40 hours of paid sick leave per year.
All employers who work in Minneapolis with six and more employees must provide employees with paid leave of 1 hour for every 30 hours worked (up to a maximum of 48 hours for the year), and employers with less than five employees must provide leave. Still, they can choose whether they want to pay it or not.
In St. Paul, employers whose employees worked for 80 hours or more within one year are required to give 1 hour for every 30 hours worked (maximum of 48 hours of paid sick leave per year).
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, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave. Employees must give adequate notice before the leave dates (at least 30 days).
The Minnesota Human Rights Act was also introduced to provide protection against discrimination-based sex, including pregnancy, childbirth, and disabilities related to pregnancy or childbirth.
Maternity Leave
See Sick Leave above.
In addition, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave.
Employees must give adequate notice before the leave dates (at least 30 days).
The Minnesota Human Rights Act was also introduced to provide protection against discrimination-based sex, including pregnancy, childbirth, and disabilities related to pregnancy or childbirth.
Paternity Leave
See Sick Leave above.
Parental Leave
See Sick Leave above.
In addition, there is the Minnesota Pregnancy & Parental Leave Act, which requires employers (with 21 or more employees) to provide their employees with 12 weeks of unpaid parental leave.
Employees must give adequate notice before the leave dates (at least 30 days).
Other Leave
Minnesota law requires all employers to provide their full-time employees job-protected but unpaid leave for their duty as jurors or as a witness in a case, responding to a subpoena, or acting as a plaintiff or defendant in the courts.
Employees must provide a copy of the jury summons to the employer as evidence of requirement.
In addition to the federal law USERRA, Minnesota 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.
Employers must grant up to one day of unpaid leave per calendar to an employee who is an immediate family member of a member of the U.S. armed forces that has been ordered to active service.
The employer must grant ten working days of unpaid leave to an employee who is an immediate family member of a member of the U.S. armed forces that have been injured or killed while engaged in active service.
Minnesota law requires all employees registered to vote to take a reasonable amount 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.
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 case-by-case.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Minnesota law does not specify a fixed universal pay-period (e.g., “by the 10th of the month”). It requires that wages must be paid at least once every 31 days for current employees under Minnesota Statute 181.14. |
|
The statute does not mandate payment only via bank account for all employees. Under Statute 181.13(b) the wages must be paid in “the usual manner of payment” unless the employee requests they be mailed. |
Notice Period
In Minnesota, most employees are employed “at-will,” and either party can terminate the employment relationship without notice.
An employer’s policy or employee contract governs whether earned or unused vacation is paid on separation.
There is no official notice period. Still, in general practice, two weeks’ notice is a minimum requirement.
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.
Employers who choose to offer severance would need to have the provisions within the employee’s contract and agreed by both parties, many employers choose to offer severance payment linked to the employee’s length of service.
Most common in Minnesota is one week pay for every year of service.
Probation Period
No legal provision governs a formal “trial/probation period.” 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
Minnesota has a State sales tax of 6.875%. Local jurisdictions can add an additional Local sales tax ranging up to a further 2.00%.
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Payroll and Benefits Guide
in United States – Minnesota
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 Jan 2025 | Wednesday | New Year’s Day | |
| 20 Jan 2025 | Monday | Martin Luther King Jr. Day | |
| 17 Feb 2025 | Monday | Presidents Day | |
| 26 May 2025 | Monday | Memorial Day | |
| 19 Jun 2025 | Thursday | Juneteenth | |
| 4 Jul 2025 | Friday | Independence Day | |
| 1 Sep 2025 | Monday | Labor Day | |
| 13 Oct 2025 | Monday | Columbus Day | |
| 11 Nov 2025 | Tuesday | Veterans Day (applicable to veterans and active military only) | |
| 27 Nov 2025 | Thursday | Thanksgiving Day | |
| 28 Nov 2025 | Friday | Day After Thanksgiving | |
| 25 Dec 2025 | Thursday | Christmas Day |
Questions & Answers