Payroll Done Right

Connecticut Payroll Requirements: What Employers Need to Know in 2026

Connecticut payroll carries one of the higher administrative burdens in the Northeast because employers must manage state income tax withholding under a graduated rate schedule, Paid Family and Medical Leave (PFML) contributions, State Unemployment Insurance, and mandatory paid sick leave. The state income tax uses seven brackets ranging from 2% on the lowest income to 6.99% on income above $500,000 for single filers. Employers withhold based on the Connecticut Withholding Tables issued by the Department of Revenue Services and file the quarterly CT-941 to reconcile withheld amounts.

Connecticut's PFML program requires a 0.5% employee-side contribution on wages up to the Social Security wage base ($168,600 in 2026). There is no employer contribution to PFML — the full 0.5% comes from employee wages. Employers with one or more employees must withhold and remit this contribution to the Connecticut Paid Leave Authority quarterly. This is separate from the SUI program, which is administered by the Connecticut Department of Labor. New employers pay SUI at 3.0% on a $25,000 taxable wage base, for a maximum of $750 per employee in the first year. See how Connecticut SUI rates are assigned and how the experience-rating period affects your rate in years two through four.

Connecticut's minimum wage is $16.35 per hour in 2026, indexed to the Employment Cost Index (ECI) rather than the Consumer Price Index. This indexing method can produce different adjustment amounts than CPI-linked states. The state minimum wage has no separate tipped employee rate that falls significantly below the full minimum — the tipped credit is limited, and employers in food service should verify current tipped wage requirements with the Connecticut Department of Labor before each fiscal year.

Connecticut's mandatory paid sick leave law applies to employers with 25 or more employees. Covered employees accrue one hour of paid sick leave for every 40 hours worked, up to 40 hours per year. The law covers service workers as defined by statute, but Connecticut has been expanding coverage. Employers below the 25-employee threshold are not subject to the state paid sick leave mandate, though the PFML contribution still applies regardless of employer size. Final paycheck timing requires payment on the next regular payday following termination for both discharged and resigned employees. Review Connecticut payday law requirements including wage payment methods, pay frequency rules, and permitted deductions.

Connecticut employers must also file the UC-2 (Employer's Quarterly Wage Report) and UC-5A with the Department of Labor each quarter. These unemployment filings are due by the last day of the month following the close of each quarter. The CT-941 withholding return follows the same quarterly schedule. Employers with larger withholding obligations may be required to deposit on a more frequent schedule — semi-weekly or monthly — based on prior-year liability thresholds set by the Department of Revenue Services.

New hire reporting in Connecticut must be submitted within 20 days of the employee's first day of work to the Connecticut Department of Labor's New Hire Registry. The state accepts online reporting through the CT Business One Stop portal. For businesses setting up Connecticut payroll for the first time, the registration sequence involves the Department of Revenue Services for withholding, the Department of Labor for SUI and new hire reporting, and the Paid Leave Authority for PFML. Get the complete Connecticut new employer registration guide with account numbers, portal links, and registration timing guidelines.