Colorado Paystub Requirements and Tax Regulations
Before initiating the distribution of pay stubs to your employees and contractors in Colorado, it's crucial to familiarize yourself with the pertinent laws and regulations governing employers in the state. .
This guide will outline the essential guidelines for managing payroll and issuing pay stubs in accordance with Colorado's legal framework.
Pay stub regulations in Colorado
1. Are pay stubs required by law in Colorado?
Employers in Colorado must provide their employees with pay stubs every payday.
2. How often do you need a pay stub in Colorado?
Employers are required to pay employees no greater duration than one calendar month or thirty days, whichever is longer. As pay stubs are mandatory in Colorado, you will need to provide pay stubs every time you pay your employees.
3. What information can be included on a pay stub in Colorado?
The following information must be included in employee pay stubs or pay statements:
- Gross wages earned for the specific pay period, not gross wages for the year-to-date
- Withholdings and deductions
- Net wages
- Pay period
- Employee information such as name, last 4 digits of social security number, and address
- Employer information such as name, employer identification number (EIN), and address
4. Does Colorado have a state income tax?
Yes, state income taxes are applicable to employees in the state of Colorado.
5. Are there any other taxes applicable to Colorado?
Yes. Employers need to withhold family leave insurance tax from employee’s pay in addition to federal taxes.
Information needed to generate pay stubs
To provide employees with accurate pay stubs, the information below is required.
- Gross salary month-to-date
- Annual withholding allowance amount
- The employee’s exemption status from state withholding
- Employee’s filing status and additional state withholding amount
Colorado wage and hour laws
Employers are required to provide minimum wage, overtime pay, meal and rest breaks, and paid time-off benefits to all non-exempt employees.
The law covers the following:
Minimum wage
The state of Colorado has set a minimum wage for employees and employers are required to pay at least the minimum wage set.
For 2024, the minimum wage to be paid for employees in Colorado is $14.42 per hour.
Overtime pay
According to the Colorado Overtime and Minimum Pay Standards Order (COMPS), employees who work more than
- 40 hours a workweek
- 12 hours in a workday
- Any 12 consecutive work hours should be paid an overtime pay of 1.5 times the regular pay rate.
Meal breaks
Employers should give at least 30 minutes of meal breaks to employees if their shift exceeds 5 hours
Rest breaks
Based on the Colorado wage and hour law, here is the detailed breakdown of rest breaks:
| If an employee worked | Employers should offer rest breaks of |
|---|---|
| 2 or fewer hours | 0 |
| 2 to 6 hours | 1 |
| 6 to 10 hours | 2 |
| 10 to 14 hours | 3 |
| 14 to 18 hours | 4 |
| 18 to 22 hours | 5 |
| Over 22 hours | 6 |
Paid time off and leave
Employers in Colorado need to provide required and non-required leaves for their employees.
| Required Leave | Non-Required leave |
|---|---|
| Unpaid | Paid or Unpaid |
| One hour of sick leave per 30 hours worked, up to 48 hours in a year | Bereavement leave |
| Jury duty leave | Vacation time |
| Voting time | Holiday leave |
| Military leave of 15 days | |
| Domestic violence or sexual assault leave up to 3 days |
Colorado State payroll taxes 2024
In Colorado, payroll taxes are categorized into various types, including:
- Colorado Personal Income Tax(PIT)
- Colorado State Unemployment Insurance (UI)
- Colorado Paid Family and Medical Leave (PFML)
Colorado Personal Income Tax(PIT)
In Colorado, state personal income tax rates vary depending on an individual's filing status and income level. These filing statuses include Single, Married Filing Separately, Married Filing Jointly, and Head of Household.
For the Taxable Year 2024, the Colorado individual income tax rate is set at 4.40%.
Colorado State Unemployment Insurance (UI)
The State Unemployment Tax Act (SUTA) in Colorado was established to assist individuals encountering unemployment by facilitating the provision of unemployment benefits. This legislation empowers the state to gather the necessary funds to administer unemployment insurance benefits to qualified individuals who find themselves without employment.
In Colorado, SUTA (State Unemployment Tax Act) rates span from 0.81% to 12.34%. For the year 2024, the wage base is set at $23,800.
Colorado Paid Family and Medical Leave (PFML)
Both employers and their employees share responsibility for funding the FAMLI (Family and Medical Leave Insurance) program, with an option to split the cost equally at 50/50. Premiums are calculated at 0.9% of the employee's wage, with 0.45% contributed by the employer and 0.45% by the employee. Alternatively, employers have the flexibility to cover the entire premium amount, offering it as an additional benefit to their employees. These premiums are applicable to wages up to the Federal Social Security Wage Cap, which stands at $168,600 for earnings in 2024.
New Jersey payroll tax filing
- Report of New hire Employees
- Report of New hire Independent Contractors
- Colorado personal income tax filing
- The Colorado Quarterly Premium and Wage Reports
Report of New hire Employees
All employers must report all newly hired employees to the Colorado State Directory of New Hires within 20 days from their initial date of employment.
Report of New hire Independent Contractors
Service recipients, similar to employers, are obliged to report service providers, who are independent contractors, under similar requirements. Independent contractors, also known as self-employed or contract employees, should be reported to the Colorado State Directory of New Hires by service recipients within 20 days from their initial date of work, provided they have furnished their Social Security Number for tax purposes. However, reporting is not required if they have provided a Federal tax ID (FEIN).
How to report employees and independent contractors new hire in Colorado?
In Colorado, there are various options for submitting new hire information, offering flexibility in the reporting process.
| Online | Fax | |
|---|---|---|
| Employees and independent contractors New Hire Report | Address Information: P.O. Box 13089 Sacramento, CO 95813 Email: CDHS_FSREmployerServices@state.co.us Direct Phone: 303-297-2849 Public Phone: 800-696-1468 | Fax 1: 303-297-2595 |
Colorado personal income tax filing
For Colorado's personal income tax, the deadline is April 15, 2024. If you can't file by then, you get a six-month extension, but no extension for tax due. To avoid penalties, pay 90% of the tax by April 15th, and the rest with interest. Pay through Revenue Online or use the Extension Payment (Form DR 0158-I). After paying 90%, you have until October 16th to file your Colorado Income Tax Return ( Form DR 0104).
The Colorado Quarterly Premium and Wage Reports
As per Colorado Unemployment Insurance (UI) Law, businesses must submit quarterly reports within the month following the end of each calendar quarter. These wage reports are mandatory for compliance with state regulations. Employers have the option to report their wages through MyUI Employer+. If currently filing reports via paper, they must register for a MyUI Employer+ account and transition to online filing.
| Reporting Period | Due Date |
|---|---|
| Quarter 1(January, February, March) | April 30 |
| Quarter 2(April, May, June) | July 31 |
| Quarter 3(July, August, September) | October 31 |
| Quarter 4(October, November, December) | January 31 |
Have all the information handy?
With SecurePayStubs, you can calculate accurate federal and Colorado state taxes for your employees and generate pay stubs securely.
Processing payroll manually is complex
As a business owner who runs payroll manually, you will need to keep up with ever-changing payroll laws. You already have a lot on your plate and you might not want to get into the complex process of pay stub generation.
SecurePayStubs offers a convenient solution for generating pay stubs for both employees and independent contractors, ensuring accuracy in federal and Colorado state tax calculations. With our paystub generator, you can swiftly create pay stubs in under 2 minutes. Enter the basic employee and employer information, select a pay stub template for free, and let SecurePayStubs calculate the applicable payroll taxes accurately.
Spend less time generating pay stubs and more on your business growth.
This article has been updated from its original publication date of April 9, 2024.