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This page contains information for Commonwealth of Massachusetts departments’ payroll teams on all aspects of state payroll, tax information, and labor cost management.
This page contains information for Commonwealth of Massachusetts departments’ payroll teams on all aspects of state payroll, tax information, and labor cost management.
Tax brackets and supplemental wage rate for Tax Year 2024 are included in this memo.
VIEW PDFThis memo provides departments with instructions and important processing dates for year-end tax reporting and payroll processing. This information should be shared with relevant staff in your department.
VIEW PDFThis memo explains the MEPSL program and provides payroll instructions for how Commonwealth payroll staff are to enter pay for eligible employees.
VIEW MEMOCore User Access to the Human Resources / Compensation Management System (HR/CMS)
VISIT HR/CMSResource documents and links for departments to manage and process payroll
Job aids and training materials for many payroll processes. [Login required.]
Labor Cost Management (LCM) is the Commonwealth's labor distribution and cost allocation system and acts as the accounting source of all payroll related MMARS financial information.
VISIT CTR INTRANETThe Commonwealth of Massachusetts 403(b) Elective Savings Plan operates under section 403(b) of the Internal Revenue Code. Participation is voluntary.
Only departments with an educational mission may offer Plan participation to employees. These include:
All employees of these departments are eligible to participate in the Plan, except that student employees whose employment is incidental to their education are not eligible.
The method of assessing Unemployment Insurance, Universal Health Insurance and the employer’s share of the Medicare tax will be through the fringe benefit rate. The rate used to determine the employer’s share of these benefits is estimated at 1.34% (check for updates). The rate is applied to the salaries expended under AA and CC object codes. There is no change in the method used to calculate the employee’s share of Medicare tax withholding.
All fringe benefit assessments determined by these rates will be charged to object code D09.
NOTE: Tax Chargebacks will be assessed to the account incurring the salary.
Departments have a periodic need to update compensation for groups of employees. CTR will facilitate requests to provide mass update of compensation.
Departments are responsible for determining and/or verifying the Medicare tax status of each of their employees, and entering that status correctly into HR/CMS. This requires confirming whether an employee has a concurrent job and ensuring that both jobs have the same/correct Medicare status in HR/CMS. Because HR/CMS security does not allow for cross department view, errors sometimes occur.
In order to assist departments in ensuring compliance, report HMTAX010 allows departmemts to view any inconsistent Medicare tax status for any concurrent job from any department.
Implementation instructions and related documents regarding pay and other benefits for state employees called up for active military duty, and tax information for members of the United States Armed Forces, are available at the following links:
Receipt Vouchers are recoupments or payments back to the Payroll System to correct employee earnings, tax and other balances. The completion of the Employee Balances (Form W-2 purposes) occurs when HR/CMS shows the confirmed Off Cycle activity in Paycheck Data. The completion of the MMARS (cash) Balances occurs when the valid MMARS PRRFC (Current Fiscal Year) or PRRFP (Prior Fiscal Year) documents are automatically created by the Off Cycle activity.
If there are no accounting/distribution problems the PRRFC/PRRFP will be submitted. The Office of the Comptroller will then finalize the corresponding PRRVs.
See the Check Reversal Flowchart and the Payroll Refund Receipt Voucher (PRRV) Job Aid for additional information. [MAGNet or VPN access required].
New hires must:
Sign the Form SSA-1945 Statement
Complete the Form W-4
Departments are reminded to:
For Employees that are claiming exempt status, the IRS requires employees to refile a new Form W-4 every year. The deadline is February 15. If claiming both federal and state exempt status, the IRS Form W-4 will suffice. It will not need to be filed to the IRS or Department of Revenue (DOR). DOR requires certificate “M-4” to be filed when claiming exempt from state taxes only.
Report HTAX103 titled “RESET W-4 EXEMPT EMPLOYEES – REPORT/UPDATE REPORT” has been created to identify employees in your department that do not have an new Exemption entry for the current tax year. This report is currently accessible through Document Direct.
All forms should be kept on file at the department.
The IRS Form W-4 has two conditions from which an employee can claim “exempt” from federal Withholdings (W-4 2021). Both conditions must be met:
Mass DOR Circular M (2019) states any employee with an annual salary less than $8,000.00 should not have taxes withheld.
To set-up as “Exempt” in HR/CMS, use the “Maintain Taxable Gross” radial button and enter $0 for Additional Withholdings.
The Massachusetts Department of Revenue allows employees to receive the first $2,000.00 in combined Retirement Deductions and Medicare Tax to be excluded from Massachusetts Taxable Gross Wages.
From the start of the new calendar year (January) up until the $2,000.00 threshold is met, employees will have less Massachusetts Taxable Gross to deduct taxes from, thus less state taxes taken.
Employees will see a gradual increase in their Massachusetts tax withholding (sometimes up to two pay periods) as they approach the $2,000.00 threshold.
Non-cash car benefit
Employees who receive non-cash car benefits or commute in vehicles provided by the Commonwealth may be required to add that value in their reportable wages.
Non-cash parking benefit
Employers who provide employees with free parking valued in excess of the federal and state exclusion amounts are required to add any excess value as part of the employees’ gross income for tax reporting and withholding purposes.
Qualified Transportation Benefit Program
Employees who have enrolled in the Commonwealth’s Qualified Transportation Benefit Program may receive parking benefits via pretax payroll deductions up to any applicable federal and state exclusion amounts.
Unemployment Insurance (UI) and Universal Health Insurance (UHI) are employer related taxes created as an umbrella for those without health care coverage, or who are jobless.
The Commonwealth of Massachusetts, as the employer, pays these taxes, not the employee. Not all Commonwealth positions are eligible. The following job categories are exempt from UI and UHI taxes:
Because the exempt status is maintained at the employee level, an employee with multiple jobs will be exempt for all jobs.
Departments are required to maintain the exempt from UI / UHI tax fields in HR/CMS.
