ST. PAUL – After extensive public engagement and following recommendations from independent actuaries, Paid Leave at the Minnesota Department of Employment and Economic Development (DEED) confirmed today that when Paid Leave begins for Minnesotans in January 2026, the premium rate will be 0.88 percent. The agency also released a calculator to help Minnesotans estimate their costs.

Like unemployment insurance, ongoing Paid Leave program expenses are funded by premiums paid by employers and individuals. The premium rate is a percentage of an employee's wages that will be paid by the employee and their employer to fund the program, split evenly between the employee and the employer. The 0.88% rate is based on recommendations from independent actuaries.

While every state with paid leave is different, Minnesota's premium rate ranks 4th lowest out of 14 programs for cost to employers and employees.

Last summer and fall, Paid Leave staff traveled over 3,000 miles for 18 meetings to answer more than 550 questions from over 1,000 Minnesotans, including business leaders and local chambers of commerce. Those questions, suggestions and requests are helping build a better Paid Leave program for all Minnesotans.

Paid Leave makes time for some of life's most important moments by providing partial wage payments and job protections. Leave can be taken for one's own medical needs, to bond with a new child, care for a family member or for certain military or personal safety needs. In one benefit year, Minnesotans can take up to 12 weeks of medical leave for their own medical needs, or up to 12 weeks of family leave to care for others. If someone qualifies for both types of leave in a year, they can take a combined total of up to 20 weeks of leave.

"In our families, workplaces and communities, Minnesotans take care of each other," said DEED Commissioner Matt Varilek. "But for too many, missing a paycheck to provide care leads to missing rent or not being able to put food on the table. Paid Leave means that Minnesotans no longer have to choose between care for themselves and their families, or their livelihood."

The new calculator tool will help Minnesota employers and individuals understand what their costs will be under Paid Leave. The tool gives an estimate of the premiums that will be first due in April 2026, after the program launches in January 2026. After the first year, the premium rate will be set annually.

During outreach and engagement sessions, Paid Leave officials heard from employers about their desire to avoid duplicate work and to use systems they already know. To make things easier, Paid Leave partnered with DEED's Unemployment Insurance (UI) program to use the familiar UI system to report employee wages. Thanks to outreach efforts and employer engagement, wage detail reports for over 3.4 million employees were successfully submitted to both the UI and Paid Leave programs in October 2024.

In December, Paid Leave shared information about equivalent plans for paid leave. This information, and the new calculator tool, can be found in the employer toolkit on the Paid Leave website. Similar resources are coming for individuals, healthcare and service providers and community-based organizations.