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Before providing pay stubs to employees and contractors in Maryland, it's essential to understand the relevant laws and regulations.

This guide elucidates the legal framework applicable to employers in Maryland concerning payroll management and the provision of pay stubs.

maryland

Pay stub regulations in Maryland

1. Are pay stubs required by law in Maryland?

Employers in Maryland must provide their employees with pay stubs every payday.

2. How often do you need a pay stub in Maryland?

You will need to pay your employees on a semi-monthly basis. As pay stubs are mandatory in Maryland, you will need to provide pay stubs every time you pay your employees.

3. What information can be included on a pay stub in Maryland?

The following information must be included in employee pay stubs:

  • 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
  • Employee's earnings, hours worked, and any subsidies.
  • Pay Information and Tax Exemptions
  • Total Earnings;
  • Employee's taxes and deductions.
  • Gross pay
  • Pay period ending date

4. Does Maryland have a state income tax?

Yes, state income taxes are applicable to employees in the state of Maryland

5. Are there any other taxes applicable to Maryland?

Yes. There are local taxes in Maryland (each county—of 24 counties—does set a local tax). To know more about Maryland's local tax rates, click here.

Information needed to generate pay stubs

To provide employees with accurate pay stubs, the information below is required.

  • Maryland State Tax Exemption status for PA residents
  • Employee's total allowances
  • Employee's exemption status from state withholding
  • Filing status and additional state withholding amount

Maryland wage and hour laws

Employers operating in Maryland are obligated to comply with wage and hour regulations. These regulations ensure that non-exempt employees are compensated at least the minimum wage, receive adequate pay for overtime work, are provided with necessary meal and rest breaks, and accrue suitable paid time-off benefits.

The employment laws in Maryland encompass various aspects

  • Minimum wage
  • Overtime pay
  • Meal breaks
  • Rest breaks
  • Paid time off and leave

Maryland Minimum wage

In Maryland, businesses are legally mandated to ensure that their employees are paid at least the minimum hourly wage as set forth by statutory regulations.

As of 2024, the Basic Minimum Rate per hour is $15.00.

Overtime pay

In Maryland, overtime pay is compensation provided to employees at a rate of one and one-half (1.5) times their regular hourly wage for work done beyond 40 hours within a seven-day period. However, for specific occupations in the state, such as certain farmworkers, overtime calculations may apply to hours worked beyond 60 in a week. It's important to note that both state and federal laws outline exemptions for certain employers from the obligation to pay overtime, and some employees may not be entitled to receive it.

Maryland meal break

According to the Healthy Retail Employee Act, specific retail workers are eligible for 15-minute breaks if their shifts span between 4 to 6 hours. Additionally, employees who work shifts exceeding 8 hours are entitled to an extra 15-minute break for every additional four hours worked beyond the initial 8-hour period.

Maryland rest break

According to the Healthy Retail Employee Act, specific retail workers are eligible for 15-minute breaks if their shifts span between 4 to 6 hours. Additionally, employees who work shifts exceeding 8 hours are entitled to an extra 15-minute break for every additional four hours worked beyond the initial 8-hour period.

Paid time off and leave

Maryland law mandates employers to offer a range of leave benefits to employees, comprising both compulsory and discretionary options.

Required LeaveNon-Required leave
paidUnpaidPaid or Unpaid
Voting leave - Up to two hours of paid leave to voteEmployers might need to grant employees unpaid leave as stipulated by the federal Family and Medical Leave Act (FMLA).Vacation leave
Jury Duty leaveBereavement leave
Military leaveHoliday leave
Bone marrow organ donation leave
Parental leave
Family Military leave

Maryland State payroll taxes 2024

In the state of Maryland, payroll taxes are classified into different categories.

  • Maryland Personal Income Tax(PIT)
  • Maryland State Unemployment Insurance (UI)
  • Maryland Paid Family and Medical Leave (PFML)

Maryland Personal Income Tax(PIT)

In Maryland, state personal income tax rates fluctuate based on an individual's filing status and income level, with filing statuses comprising Single, Married Filing Separately, Married Filing Jointly, and Head of Household.

Maryland's individual income tax rates are segmented into various brackets: 2.00%, 3.00%, 4.00%, 4.75%, 5.00%, 5.25%, 5.50% and 5.75%

Maryland State Unemployment Insurance (UI)

Maryland enacted the State Unemployment Tax Act (SUTA) to support individuals facing unemployment by providing unemployment benefits. This legislation enables the state to collect essential funds to administer unemployment insurance benefits to eligible individuals during periods of unemployment.

In Maryland for the year 2024, the State Unemployment Tax Act (SUTA) rates range from 0.30% to 7.50%.

Specifically:

  • New employers are subject to a rate of 2.60%.
  • Foreign contractors, which include new construction employers headquartered in another state, face a rate of 3.30%.
  • The standard rate, applicable to most employers, is 7.50%.
  • Additionally, the taxable wage base for SUTA in 2024 in Maryland is set at $8,500.

Maryland Paid Family and Medical Leave (PFML)

Family and Medical Leave Insurance (FAMLI) in Maryland allows eligible workers to take up to 12 weeks of paid leave to care for themselves or a family member, receiving up to $1000 a week. Employers with 15 or more workers contribute 0.90% of covered wages, divided equally between workers and employers. Employers with 14 or fewer workers aren't required to contribute but collect 0.45% from workers. Workers in private plans can't be charged more than the state plan rate. Eligible employees need to work at least 680 hours in a Maryland-based position in the 12 months before needing leave.

Maryland payroll tax filing

Report of New hire Employees

Both federal and state legislation necessitates employers in Maryland to report newly hired and re-hired employees to the Maryland State Directory of New Hires.Employers are required to submit this information within 20 days of the hire or re-hire date.

Report of Independent Contractors

Maryland state employers are not obligated to report newly hired independent contractors to the Maryland State Directory of New Hires.

How to report employees new hire in Maryland?

In Maryland, there are various options for submitting new hire information, offering flexibility in the reporting process.

OnlineMailFax
Employees New Hire ReportAddress Information:
Maryland State Directory of New Hires
Operation Center
P.O. Box 1316
Baltimore, MD 21203
Direct Phone: 443-257-3605
Public Phone: 800-524-9846
Email: arlette.thomasfletcher@maryland.gov
Fax 1: 410-281-6004
Fax 2: 888-657-3534

Maryland personal income tax filing

For fiscal year taxpayers, the income tax return is due on April 15, 2024. If filing electronically and requesting direct deposit, refunds are processed within 72 hours (with exceptions) and issued within 5-7 business days. Electronic payments can be made until April 30th. If both filing and paying electronically, the return is due on April 15th, with the option to pay electronically until April 30th. Filing electronically through the free online service is recommended, and paper copies should not be sent if filing electronically.

The available forms for filing income tax returns in Maryland include:

  • Maryland Nonresident Income Tax Return (Form 505)
  • Maryland Resident Income Tax Return (Form 502)

Maryland Quarterly Contribution Report

Maryland employers are obligated to submit UI contribution reports each calendar quarter, ensuring timely payment of taxes. Utilizing BEACON, employers can file these reports and pay UI taxes conveniently. Even if no wages are paid or there are no employees during a quarter, contribution reports must still be filed. Gross wages paid each quarter must be reported accurately. Reporting and tax payment deadlines are within one month after the end of each calendar quarter, with reports due the next business day if the deadline falls on a weekend.

Reporting PeriodDue Date
Quarter 1April 30
Quarter 2July 31
Quarter 3October 31
Quarter 4January 31

Late filing of the quarterly contribution report or in an approved format may lead to interest charges and penalties. To prevent these consequences, ensure timely filing to avoid:

  • Interest charges of 1.5% per month for delayed payments.
  • Penalty assessment of $35 for each late or improperly filed report.

Have all the information handy?

With SecurePayStubs, you can calculate accurate federal and Maryland state taxes for your employees and generate pay stubs securely.

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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.

With SecurePayStubs' paystub generator, you can swiftly create accurate pay stubs for both employees, including federal and Maryland state taxes, and independent contractors, all completed in less than 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.

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This article has been updated from its original publication date of April 10, 2024.