Overview
What Is the New York Paid Family Leave Payroll Deduction?
The New York Paid Family Leave (PFL) payroll deduction is the employee contribution that funds the state's Paid Family Leave insurance program. Every covered private-sector employee funds Paid Family Leave insurance, and that insurance pays wage replacement benefits when a worker takes leave to bond with a new child, care for a family member with a serious health condition, or handle qualifying events tied to a family member's active-duty military deployment.
Most employees of private employers in New York State are covered. Public employers, including state and local government agencies, can voluntarily opt in to provide the benefit. Employers can require employees to pay the full weekly contribution through payroll deduction, or the employer can absorb the cost. If the employer pays the full cost, no deduction is taken from employee paychecks.
The 2026 rate and cap were set by the New York Department of Financial Services in the annual premium rate decision that takes effect January 1 each year. This is general information, not tax advice.
The Number
How Is the 2026 Deduction Calculated on Each Paycheck?
For 2026, the New York Paid Family Leave deduction is 0.432% of an employee's gross wages each pay period, up to a maximum of $411.91 for the year. Paid Family Leave may be funded by employees through these payroll deductions.
The rate increased from 0.388% in 2025, and the annual cap rose from $354.53. The New York Department of Financial Services published this as an 11.31% increase in the premium rate compared with calendar year 2025.
Two rules keep the calculation simple:
- If an employee's wages for the year multiplied by 0.432% would exceed $411.91, the deduction stops once the cap is reached.
- If an employee's annual wages are lower than the New York State Average Weekly Wage times 52, the employee contributes less than the cap, and the total for the year equals 0.432% of actual gross wages.
The 2026 New York State Average Weekly Wage (NYSAWW) is $1,833.63. An employee earning that wage every week hits the annual cap almost exactly.
Who Pays
Who Has to Pay the New York Paid Family Leave Deduction?
The deduction applies to most private-sector employees who work in New York State, regardless of where they live. Employment must be localized in New York, so an employee whose primary work location is in the state pays the deduction even if they live in New Jersey, Connecticut, or Pennsylvania.
Eligibility thresholds for actually taking leave are separate from the deduction:
- Full-time employees (20 or more hours per week) qualify to use PFL after 26 consecutive weeks of employment with the same covered employer.
- Part-time employees (fewer than 20 hours per week) qualify after working 175 days for the same employer, and those days do not have to be consecutive.
Certain categories of workers are excluded from coverage under New York law. Employers that are not required to provide coverage can apply for voluntary coverage. Public-sector employees, self-employed workers, and independent contractors are not automatically covered but may opt in.
An employee who will not meet the minimum time requirement, such as a seasonal worker on a short-term assignment, can file a formal waiver and avoid the payroll deduction entirely.
Tax Treatment
Is the New York Paid Family Leave Deduction Pre-Tax or Post-Tax?
The Paid Family Leave contribution is deducted from wages on a post-tax basis. The New York Department of Taxation and Finance addressed this in Notice N-17-12, which set the tax treatment when the program began. The notice states that premiums are deducted from employees' after-tax wages, so the deduction does not reduce taxable wages.
Employers report the contributions in Box 14 of Form W-2 as state disability insurance taxes withheld, rather than reducing Box 1 wages. Under the same notice, Paid Family Leave benefits are taxable non-wage income that must be included in federal gross income. The State Insurance Fund reports benefits on Form 1099-G, and all other payers report them on Form 1099-MISC.
State disability insurance (SDI) is a separate deduction under New York law and follows its own rules. NY PFL and NY SDI are often listed on the pay stub as two different lines, and they cover different types of leave.
Taking Leave
When Are You Eligible to Use Paid Family Leave?
Paying the deduction does not, by itself, entitle you to take leave. You must also meet the tenure requirement with the current employer. Full-time workers reach eligibility at 26 consecutive weeks of employment; part-time workers reach it after 175 days worked.
Once eligible, a worker may take PFL for three types of qualifying events:
- Bonding leave for a new child by birth, adoption, or foster placement, taken within 12 months of the birth or placement.
- Family care leave to care for a family member with a serious health condition. Family member includes spouse, domestic partner, child, parent, parent-in-law, grandparent, grandchild, and sibling.
- Military family leave to help handle affairs when a spouse, domestic partner, child, or parent is on active duty abroad.
Leave can be taken in one continuous block or in daily increments. The 12-week maximum applies within a 52-week period. Employees cannot use PFL for their own serious health condition; that use case is covered by short-term disability, which is a separate New York insurance program.
How the 2026 Deduction Works at Three Wage Levels
| Line item | Amount |
|---|---|
| Employee A weekly gross wage | $800.00 |
| Employee A weekly deduction (0.432%) | $3.46 |
| Employee A annual deduction (52 weeks) | $179.92 |
| Employee B weekly gross wage | $1,833.63 |
| Employee B weekly deduction (0.432%) | $7.92 |
| Employee B annual deduction (52 weeks) | $411.91 (reaches cap) |
| Employee C annual gross wage | $180,000 |
| Employee C total deduction (capped) | $411.91 |
Three employees paid weekly in 2026. All figures use the 0.432% rate and $411.91 annual cap.
Benefit Amount
How Much Does Paid Family Leave Actually Pay While You Are Out?
Paid Family Leave pays 67% of the employee's average weekly wage while on leave, subject to a statewide cap. For 2026, the benefit is capped at 67% of the New York State Average Weekly Wage of $1,833.63, which produces a maximum weekly PFL benefit of $1,228.53. That is $51.21 more per week than the 2025 maximum of $1,177.32.
The employee's own average weekly wage is calculated from the eight weeks of gross wages immediately preceding the first day of leave. Lower-wage workers receive 67% of their own smaller wage rather than the statewide cap, and higher-wage workers are capped at $1,228.53 no matter how much they normally earn.
PFL benefits are paid by the employer's PFL insurance carrier, not the state. Employers cannot require an employee to use paid time off before taking PFL, though the two can be coordinated by agreement. Health insurance must be maintained on the same terms as if the employee were still at work, and the employer must reinstate the employee to the same or a comparable position at the end of the leave.
Life Changes
What Happens to the Deduction If You Change Jobs or Move?
If you change jobs during the year, each employer takes the deduction from the wages it pays. The DFS rate decision says that once an employee's contributions reach the $411.91 annual maximum before the end of the calendar year, the employee is not liable for additional contributions that year. If you already reached the cap with an earlier employer, ask your new employer's payroll department how it handles prior contributions.
If you move out of New York but continue to be paid by a New York employer for work performed in the state, you still pay the deduction. If you move and your primary work location moves out of New York, the deduction generally stops because the program covers wages localized in New York State.
Remote workers based in New York whose employer is out of state may still be covered if the work is localized in New York. Employers with New York employees, regardless of the employer's headquarters, must obtain PFL coverage from a New York-authorized carrier, and they may collect the employee contribution through payroll deduction.
If your employer takes the wrong amount or applies the deduction to non-covered wages, ask its payroll department to correct it.
Current Rate
Where Do I Find the Current New York PFL Rate?
Rates and caps change every January. The New York Department of Financial Services issues an annual premium rate decision that sets the following year's employee contribution rate. The official sources to check are:
- paidfamilyleave.ny.gov — the state's public information portal, which publishes the current year's rate, cap, and maximum weekly benefit.
- dfs.ny.gov — the New York Department of Financial Services, which posts the annual premium rate decision.
- The 2026 Payroll Deduction Calculator on paidfamilyleave.ny.gov, which computes the per-pay-period amount for any wage figure and pay frequency.
Employers should verify the current rate at the start of each calendar year and update payroll settings before the first January pay run. The responsibility to keep the rate current in payroll settings sits with the employer or payroll provider.
Questions
New York Paid Family Leave Payroll Deduction: 2026 Rate, Cap, and Who Pays FAQ
Is the New York Paid Family Leave deduction pre-tax or post-tax?
It is post-tax. The New York Department of Taxation and Finance set that treatment in Notice N-17-12. The contribution comes out of wages after federal income tax, Social Security, Medicare, and state income tax are calculated. Employers report the amount in Box 14 of Form W-2. Because the contribution is after-tax, benefits paid out later are treated as taxable non-wage income.
Do I have to pay this deduction if my employer is based outside New York?
Yes, if your work is localized in New York State. Coverage follows the location where the work is performed, not the employer's headquarters. An out-of-state employer with even one employee whose regular work location is in New York must obtain PFL coverage from a New York-authorized carrier, and it may collect the employee contribution through payroll deduction. Cross-state remote arrangements can be complicated, so check with your payroll department.
Are New York Paid Family Leave benefits taxable when I collect them?
Yes. Because the employee contribution is a post-tax deduction, PFL benefits are treated as taxable non-wage income for federal purposes. Notice N-17-12 says the State Insurance Fund reports benefits on Form 1099-G and all other payers use Form 1099-MISC. You report that income on your federal return. Taxes are not automatically withheld from benefits, but you can request voluntary tax withholding.
Can I opt out of the New York PFL deduction?
In most cases, no. The deduction is mandatory for covered private-sector employees in New York. The only formal waiver is available to employees who will not meet the minimum tenure requirement, such as seasonal or short-term workers whose regular schedule will not reach 26 consecutive weeks or 175 days with the employer. The employer must offer the waiver and keep it on file. Otherwise the deduction continues.
Does the deduction stop once I hit the $411.91 cap for the year?
Yes. The DFS rate decision says that if an employee's contributions reach the $411.91 annual maximum before the end of the calendar year, the employee is not liable for any additional contributions for that year. If you work for more than one employer, ask each payroll department how your contributions are tracked.
Do part-time workers pay less than full-time workers?
Yes, in proportion to wages. The deduction is a percentage of gross wages each pay period, so smaller paychecks produce smaller deductions. A part-time worker who earns $400 a week pays about $1.73 a week in 2026, roughly $89.86 for a full year. Part-time workers become eligible to use PFL benefits after 175 days worked with the employer, which can accumulate over more than 26 weeks.
Do public sector employees in New York pay the PFL deduction?
Not automatically. Most employees of private employers in New York are covered, while public employers can voluntarily opt in to provide the benefit. If your public-sector employer has opted in, ask your payroll department whether the deduction applies to your pay. If it has not opted in, no deduction is taken.
- Sources: New York Department of Financial Services — 2026 PFL Premium Rate Decision · paidfamilyleave.ny.gov — 2026 Updates · paidfamilyleave.ny.gov — Cost & Deductions · paidfamilyleave.ny.gov — Eligibility · NYS Department of Taxation and Finance — Notice N-17-12 · NYS Workers’ Compensation Board — Paid Family Leave 2026 announcement · NYSIF — Paid Family Leave
- Last updated September 10, 2026
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