Maine Hiring Guide: Withholding, Unemployment Insurance at 2.54%, Paid Family and Medical Leave at 1.0%, Workers' Comp and the $15.10 Minimum Wage

Informational only: This guide explains Maine hiring and payroll rules for general information. It is not legal or tax advice. The figures reflect what was verified on October 28, 2026. Confirm current amounts with the named agency, and talk with a qualified CPA or employment attorney before you run your first payroll, especially if you have multiple owners, contractors or locations.

Your first hire is the point where a Maine business stops being just a filing and starts dealing with several state systems. Maine employer registration is not one form. Withholding goes to Maine Revenue Services, unemployment insurance goes to the Maine Department of Labor, workers' compensation goes to an insurer under the Workers' Compensation Board, and wage and leave rules come from statute. Maine also has no general statewide business license, so forming an LLC or corporation does not make you ready to hire. This guide covers each piece in the order you will likely need it.

Step One: Know What Employer Registration Covers

Before your first paycheck, plan on the following:

1. A federal Employer Identification Number from the IRS for federal payroll reporting.
2. A withholding account with Maine Revenue Services for state income tax.
3. An unemployment insurance employer account with the Maine Department of Labor.
4. A workers' compensation policy in force before the employee starts work.
5. Paid family and medical leave premium reporting and remittance.
6. Any municipal or activity-specific license your work requires.

If you formed an LLC or corporation, that Secretary of State filing is an entity document, not an employer registration. The Certificate of Formation for an LLC (Form MLLC-6) has a $175 filing fee, and Articles of Incorporation (Form MBCA-6) have a $145 filing fee. Maine does not offer online filing of formation documents, so both forms must be printed and mailed or delivered with payment. Start at the Secretary of State's corporations and commissions page.

Collect federal Form W-4 and Form I-9 from every new hire, along with the Maine withholding information your payroll system requires. Missing paperwork at the start is far easier to fix than a misclassified or unregistered employee discovered later.

Maine Withholding Tax

Maine withholding tax comes out of each employee's wages and is paid to Maine Revenue Services on the schedule the agency assigns to your account. Maine's graduated personal income tax rates run from 5.8% to 7.15%, but those rates are not what you apply to paychecks. Withholding follows the Maine Revenue Services withholding tables, which use each employee's wages and withholding information to set the amount. Use the current tables for each pay period, not a flat percentage.

Payroll software can handle the math, but you remain responsible for registering with Maine Revenue Services, withholding the correct amount and remitting on time. Maine employer registration for withholding is handled through the Maine Revenue Services website. Confirm your filing frequency and first return date there, since the schedule depends on your account.

Withholding mistakes compound quickly. A payroll provider can take over the calculations and filings for a monthly fee, which is worth comparing against doing it yourself. Get the fee and what it covers in writing before you sign, and confirm that the provider files Maine returns, not only federal ones.

Unemployment Insurance at 2.54% for New Employers

The Maine Department of Labor administers unemployment insurance, and employers pay the tax. For 2026, a new employer's combined rate is 2.54%. That figure is made up of a 2.23% base rate, 0.14% for the CSSF and 0.17% for the UPAF. The taxable wage base is $12,000, so only the first $12,000 of each employee's annual wages is taxed.

Example: An employee earning $40,000 in a year generates $304.80 in unemployment tax at the 2.54% new-employer rate (2.54% of $12,000). Your rate may change as your account develops, so confirm your assigned rate with the Department of Labor.

Questions about your unemployment account, rate notices or claims belong with the Department of Labor. Do not send them to the Workers' Compensation Board, which handles a separate system.

Paid Family and Medical Leave at 1.0%

The combined Paid Family and Medical Leave premium is capped at 1.0% of wages. That cap has applied since January 1, 2025 under 26 MRSA 850-F. How the premium is split depends on your headcount:

• 15 or more employees: You may deduct up to 50% of the premium from wages, but you must remit 100% of it.
• Fewer than 15 employees: You may deduct up to 50% from wages, and you remit only that deducted half.

Premiums are remitted quarterly. Confirm the reporting process and forms with the Maine Department of Labor, which runs the program.

Earned Paid Leave

Earned paid leave is a separate obligation under 26 MRSA 637. It applies to employers with more than 10 employees in Maine for 120 days or more in a year. Employees earn one hour of leave for every 40 hours worked, up to 40 hours a year. Track hours from the first pay period so you can show accurate accruals if an employee asks.

Workers' Compensation: No Minimum Headcount

Every private employer with at least one employee must carry workers' compensation insurance or self-insure under 39-A MRSA 401. There is no minimum headcount, so a business with a single part-time employee is covered by the same rule as a large employer. The Workers' Compensation Board oversees the system. Direct coverage and claim questions to the Board and to your insurer, not to the Department of Labor.

A business with only owners and no employees is not an employer under this rule. Confirm your status with the Board before you bring on anyone, including someone you pay as a helper, because the classification decides whether the requirement applies.

Minimum Wage: $15.10 Statewide in 2026

Maine's minimum wage is $15.10 per hour in 2026 under 26 MRSA 664. The rate is indexed and adjusts each January, so check the current figure every year before you set pay. Some cities set higher local minimums. Portland's city minimum is $16.75 in 2026, but confirm that figure with the City of Portland before you rely on it. Check the municipality where each employee works, since local rules follow the work location.

Retirement Plans: MERIT

If you have 5 or more employees and no qualified retirement plan, you must offer the Maine Retirement Savings Program (MERIT). Check with MERIT on any penalties for noncompliance and on the steps to set up employee enrollment, since the program's requirements and deadlines apply to your specific headcount.

Licenses: Set by Activity, Not by a General Permit

Maine issues no general statewide business license and no general town license. Registering an LLC, corporation or assumed name is a filing, not a license. Licenses are issued by activity:

• Municipal: Town and city officers license named activities under local ordinances, and fees vary widely by municipality. Contact the clerk where the business operates.
• Eating places: The Health Inspection Program within the Department of Health and Human Services licenses them.
• Food processing: The Department of Agriculture, Conservation and Forestry licenses food processors.
• Trades: State boards under the Department of Professional and Financial Regulation license many professions. Maine has no HVAC license and no general contractor license.

Maine has 16 counties, but they license nothing for ordinary businesses. Its 482 organized municipalities include 23 cities, 430 towns and 29 plantations. To identify what your business needs, use the free Business Answers licensing assistant from the Department of Economic and Community Development.

Assumed Names

Sole proprietors and general partnerships file a sworn assumed-name certificate with the municipal clerk where the business is carried on. LLCs and corporations file Form ASUM-5, the Statement of Intention to do Business under an Assumed Name, with the Secretary of State for $125. Municipal certificate fees are set by each city or town and are not published by the state, so confirm them locally.

Sales Tax

If you sell taxable goods or services, register for a sales tax permit through Maine Revenue Services at revenue.maine.gov. The general rate is 5.5%, with 8% on prepared food and on-premises liquor, 9% on lodging and 10% on short-term car rentals. The list of taxable services is closed. Lawn care, towing, handyman work and junk removal are not on it.

Quick Reference: Key 2026 Figures

Item	2026 Figure	Confirm With
Unemployment insurance, new employer	2.54% combined, $12,000 wage base	Maine Department of Labor
Paid family and medical leave	Combined premium capped at 1.0% of wages	Maine Department of Labor
Statewide minimum wage	$15.10 per hour	Maine Department of Labor
Portland city minimum wage	$16.75 per hour	City of Portland
State income tax withholding	Per Maine Revenue Services tables	Maine Revenue Services
Workers' compensation	Required with any employee	Workers' Compensation Board
Annual report (LLC or corporation)	$85, due June 1 each year	Secretary of State
Assumed name for LLC or corporation (Form ASUM-5)	$125	Secretary of State

Hiring Checklist

1. Get a federal EIN from the IRS.
2. File your formation document with the Secretary of State if you are an LLC or corporation.
3. Confirm the municipal and activity licenses your work requires.
4. Register for withholding with Maine Revenue Services.
5. Open an unemployment insurance account with the Maine Department of Labor, and confirm your rate.
6. Bind workers' compensation coverage before your first employee starts.
7. Set up paid family and medical leave deductions and quarterly remittances.
8. Check your MERIT obligation if you have 5 or more employees.
9. Pay at least $15.10 per hour, and check local minimums where employees work.
10. Once you have more than 10 employees in Maine for 120 days or more in a year, provide earned paid leave.
11. File your annual report by June 1 each year for $85.

Where to Get Free Help

The Maine Small Business Development Centers offer advising at no charge through the Maine SBDC, and the U.S. Small Business Administration lists its Maine resources at sba.gov/district/maine. Both are useful when you are working through a first hire and want a second set of eyes on your plan.

This article is informational and is not legal or tax advice. Payroll, leave and insurance rules change, and the figures above are a snapshot from October 28, 2026. For complex situations, including multiple owners, contractors, out-of-state employees or unusual pay structures, consult a qualified CPA for payroll and tax questions and an employment attorney for classification and compliance questions before you hire.