Other Taxes - Disability, Paid Family Leave, Commuter
Explore disability insurance, paid family leave, and commuter tax management for employees.
Overview
Disability Insurance (DBL) replaces part of an employee's income if they can't work due to disability, with Short-Term and Long-Term options available. Some states require disability insurance and payroll deductions. Paid Family Leave (PFL) provides wage replacement for family or medical reasons, and commuter taxes fund transit infrastructure in certain areas. Manage these taxes and benefits in Console by setting up workplaces and tax configurations.
Disability Insurance (DBL)
Disability insurance is a benefit that replaces a portion of an employee’s income if they are unable to work due to a qualifying disability. There are two primary types:
- Short-Term Disability (STD): Provides income replacement for a short duration, typically 3 to 6 months.
- Long-Term Disability (LTD): Kicks in after STD benefits are exhausted and can last for several years or until retirement age, depending on the policy.
Disability insurance premiums can be paid by either the employer, the employee, or both. If premiums are employee-paid, you’ll need to manage payroll deductions. Consult with the provider to see if these deductions should be set up as a pretax benefit or as a post tax deduction.
Some states, like California and New York, require employers to provide disability insurance. These state programs often require payroll deductions, which must be correctly calculated and remitted. Below is a listing of the states with requirements for payroll with disability.
|
State |
Contributions |
OnTheClock Supported? |
|
California |
Employee funded through payroll. |
Yes |
|
Hawaii |
Can be funded by the employer, the employee, or both. Employee contributions are capped. |
OnTheClock collects, but does not remit |
|
New Jersey |
Funded by payroll deductions from both employees and employers. |
Yes |
|
New York |
Can be funded by the employer, the employee, or both. Employee contributions are capped. |
OnTheClock collects, but does not remit |
|
Rhode Island |
Employee funded through payroll. |
Yes |
Paid Family Leave (PFL)
Paid Family Leave provides employees with a portion of their wages when they take time off for family or medical reasons. Typically, PFL is state-mandated and helps cover scenarios such as:
- Bonding with a new child (birth, adoption, or foster care).
- Caring for a seriously ill family member (parent, child, spouse, etc.).
- Attending to personal health needs in some states.
- Military-related exigencies (in certain states).
Depending on the state, PFL programs may be funded entirely by employee payroll deductions, by employer contributions, or by both.
|
State |
Contributions |
OnTheClock Supported? |
|
California |
Funded by employee payroll deductions. |
Yes |
|
Colorado |
Funded by both employee and employer contributions. |
Yes |
|
Connecticut |
Funded by employee payroll deductions. |
Yes |
|
Massachusetts |
Funded by both employee and employer contributions. |
Yes |
|
New Jersey |
Funded by both employee and employer contributions. |
Yes |
|
New York |
Funded by employee payroll deductions. |
OnTheClock collects, but does not remit |
|
Oregon |
Funded by both employee and employer contributions. |
Yes |
|
Rhode Island |
Funded by employee payroll deductions. |
Yes |
|
Washington |
Funded by both employee and employer contributions. |
Yes |
Commuter Tax
Some areas also have a commuter tax which is imposed on employers that are located in certain areas with mass transit. The funds collected through this tax are used for he upkeep, improvement, and expansion of the transit infrastructure, including subways, buses, and commuter rail services.
There are two notable programs that fund commuter taxes through payroll:
- New York - Payroll Mobility Tax (PMT): This tax applies to employers in the MTA region, including New York City and its suburbs. It helps fund the Metropolitan Transportation Authority (MTA). Although not a commuter benefit program itself, it indirectly supports the transit system used by commuters.
- Oregon - Portland (TriMet): TriMet, which serves the Portland area, is funded partly by a payroll tax. Employers within the TriMet service area are required to contribute a certain percentage of their payroll to fund the transit system. This is similar to New York's PMT but is specific to the TriMet district.