Source: https://mn.gov/deed/assets/paid-leave-small-employer-premium-rate-designation-acc_tcm1045-716947.pdf
Pages 1-2, text extracted with pdftotext (poppler), reading order.

Minne sota Paid Leave

Small employer premium rate designation

Paid Leave premiums
Much like private insurance, Paid Leave is funded through premiums that can be split between an employer and an
employee. For most employers, the rate for 2026 will be 0.88% of wages paid to employees up to the Social Security
withholding limit, rounded to the nearest thousand dollars (currently $185,000). Employers can deduct up to 0.44% of
wages from employees for their portion of the premium.

Small employer premium rate
Small employers pay a lower premium rate under Paid
Leave. The effective rate for small employers is 0.66%
of wages up to the same Social Security withholding
limit. Like large employers, small employers can
deduct up to 0.44% of wages from employees for their
portion of the premium.
To qualify as a small employer, a business must:
1. Have an employee count of 30 or fewer
employees in each quarter during the basis
period; and
2. Have an average employee wage equal to or
less than 150% of the statewide average
wage. This is calculated from the quarter
where you paid the most in wages.
3. Meet wage detail reporting requirements
throughout the basis period.

How your rate was assessed
To determine if an employer meets the statutory
definition of a small employer, the following steps
were applied for employers that were covered for the
entirety of the basis period.
1. Established employee count: This was accomplished by looking at the maximum number of employee records
reported on a single wage detail during the basis period. If an employer reported more than 30 records in any
quarter, they were not designated as a small employer.
2. Calculated average wage: This was accomplished by identifying the quarter with the largest amount of covered
wages and dividing those wages by the employee count. If this number was higher than $27,745.88, the
employer was not designated as a small employer.
3. Checked wage detail compliance: This was accomplished by reviewing wage detail reports across the basis
period to ensure all reports were filed. If a report was not submitted, the employer was not designated as a
small employer.
Minnesota Paid Leave
180 E 5th St, Suite 1200 | St. Paul, MN 55101 | paidleave.mn.gov

Key Terms
Basis Period
The basis period is the four-quarter period ending September 30 of the prior year. For the purpose of 2026 premiums,
this refers to the time period between October 1, 2024, and September 30, 2025.

Statewide Average Wage
The Statewide Average Wage is calculated annually by the Department of Employment and Economic Development
based on annual covered employment wage records. The Statewide Average Annual Wage for 2025 was $73,989 per
year, or $18,497.35 per quarter. 150% of that number is $27,745.88 per quarter.
Percentage

Statewide Average
Weekly Wage

Statewide Average
Wage (Quarterly)

Statewide Average
Annual Wage

100%

$1,422.88

$18,497.25

$73,989.00

150%

$2,134.30

$27,745.88

$110,983.50

Employee Count
For each employer that has been covered by Paid Leave for the entirety of the basis period, the employee count is the
maximum number of quarterly wage records reported by the employer during the basis period. In simpler terms, this
means we use the quarter where an employer reported the highest number of employees to determine the size of a
business.

Average Wage
For each employer that has been covered for the entirety of the basis period, the employer's average wage is calculated
by first taking the maximum amount of covered wages reported by the employer in a single quarterly wage record
during the basis period. This amount is divided by the maximum number of quarterly wage records reported by the
employer during the basis period.

Wage Detail Requirements
Employers are required to submit wage detail on a quarterly basis through their Employer Account at uimn.org. If an
employer has failed to report wages in one or more quarter, they cannot be designated as a small employer.

Minnesota Paid Leave
180 E 5th St, Suite 1200 | St. Paul, MN 55101 | paidleave.mn.gov

