Massachusetts Withholding Method Effective January 2024

At A Glance

• Massachusetts published the final draft for withholding tables effective January 2024.
• Massachusetts enforces the 9% (previously 4% in 2023) surtax on the high earners effective January 2024.
• The threshold for the surtax increased from $1,000,000 to $1,053,750.

Summary

The Massachusetts Department of Revenue announced withholding tables for the fiscal year beginning January 1, 2024. The new withholding method includes a surtax on earnings of $1,053,750 or more. While income under $1,053,750 is taxed at 5%, annual income above $1,053,750 will be taxed at 9%.

Beginning January 2023, Massachusetts' legislation previously imposed a surtax of 4% on high earners with an annual income of $1,000,000 and more.  However, the Department of Revenue relaxed the mandate for employers to withhold the surtax on high earners during tax year 2023. As a result, surtax withholding wasn’t included in determining whether an employer withheld the correct income tax amounts from their employees.

Beginning January 2024, employers will be required by law to withhold the 9% surtax on high earners with an annual income of $1,053,750 or more. Therefore, the 9% surtax will be applied to annual income threshold above $1,053,750.

The state’s allowances remain unchanged for tax year 2024 at $4,400 if claiming one exemption and $1,000 plus $3,400 if claiming a second exemption.
 

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For more information on Massachusetts wage and payroll tax laws, check out our Massachusetts Wage and Payroll Tax Facts page.

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Next Steps

• For more information, refer to the state's Circular M.
• Paylocity will update the withholding methods in the HR & Payroll system to reflect the new changes.

Thank you for choosing Paylocity as your Payroll Tax and HCM partner.

This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.