Massachusetts Payroll Tax and Registration Guide

Use this checklist to make sure you’ve covered everything required to set up your account as a Massachusetts employer so OnPay can accurately file and pay taxes on your behalf: 

OnPay handles the filing of all state and local taxes for businesses in Massachusetts, including:

If you are an existing employer who has previously run payroll in the state of Massachusetts, you likely already have the IDs and online accounts needed for OnPay to process your tax filings. 

If you are a new employer in Massachusetts, you will need to register your business with the Department of Revenue and Commonwealth of Massachusetts. This must be completed for OnPay to be able to file and pay your Massachusetts taxes.

State Tax ID

Existing Massachusetts Employer: 

You can find your Withholding Tax Employer Identification Number on notices received from the Massachusetts Department of Revenue. If you cannot locate this document or identification number, please call the Massachusetts Department of Revenue at (617) 887-6367 to request it.

New Massachusetts Employer: Register with the Department of Revenue

• Go to the MassTax Connect website and do the following:
• Click on “Register A New Taxpayer”
• Click “Register a business”
• After you register with the DOR, you will receive an EIN (This will be identical to your FEIN) and a tax deposit schedule. If you have questions about this process, contact the DOR at (617) 887-6367

Massachusetts Unemployment ID (DUA) and Tax Rate

Existing Massachusetts Employer: 

• You can find your Unemployment ID on the annual Tax Rate Notice received from the Commonwealth of Massachusetts. It can also be found on your Quarterly Contribution and Wage Report. 
• Your Unemployment Tax Rate can also be found on the annual Tax Rate Notice in box 2, and will generally be 2.42% for non-construction employers (and 6.72% for construction employers) with a wage base of $15,000. The rate for Employer Medical Assistance Contribution ranges from .012% to 0.34%.

New Massachusetts Employer: Register with the Commonwealth of Massachusetts

• Go to the Department of Unemployment Assistance registration website.
• Make sure you have everything listed under “What you need”.
• Click on “UI employer registration”.
• Once you have registered, you should instantly receive a UI Account Number and a UI Contribution Rate. Note: When entering your UI Contribution Rate into OnPay, please do not include the Workforce Training Rate.
• For more guidance, follow the DUA’s step-by-step instruction guide. 
• Your company will have an assigned new employer rate when it is in the first 3 years of being subject to MA SUI. The rate for new employers in a non-construction industry is 2.42%, including a 0.056% workforce training fund surcharge, and a wage base of $15,000. New employers in the construction industry will have a rate of 6.72%. If you're unsure about your rate, call the agency at (617) 626-5075 and request your current rate.

Paid Family Leave Employer Contribution Tax Rate

All Massachusetts Employers: 

• As of 2022, the Massachusetts PFL program’s contribution rate is 0.68% for employers with 25 or more employees, and 0.344% for employers with less than 25 employees. Each year, Massachusetts sends every employer an annual contribution rate notice that will then need to be updated in OnPay.
• Massachusetts PFML FAQ

OnPay works with government entities on your behalf, reporting new hires to state labor departments, calculating tax rates, and filing financial reports. To do this effectively, you will need to grant OnPay TPA access and Power of Attorney.

Third Party Administrator for Withholding and Paid Family Leave

In order to prepare and file withholding taxes for the state of Massachusetts on your behalf, you are required by the state to grant us Professional Tax Preparer Approval (TPA) access.

Here's how:

1. Log into MassTaxConnect
2. Click the Manage My Profile link in the upper right
3. Click the More… tab, and then click View Access Requests From Third Parties under "Third Party Access"
4. You'll see a Third Party Public Directory where you can search by name
5. Look for a request from "OnPay Tax Disbursement LLC", and click Approve/Deny 
6. In the Give Rights column, select the following tax accounts:
   • Withholding Tax
   • Paid Family and Medical Leave
7. In the "Granted Rights" column, select File and Pay
8. Click Next to review our information
9. Click Submit to confirm our access

 All Massachusetts Employers: Grant TPA access

 To do this:

1. Log into the Commonwealth of Massachusetts
2. Click Account Maintenance
3. Click Third Party Administrator (TPA) Authorization
4. Click New
5. Enter TPA ID - 112455 and click Search
6. Click on the TPA ID (blue) from the list
7. Click Modify
8. Add us for the following roles by checking the box beside:
• Account Maintenance Update and Submit
• Payments Update and Submit
• Employment and Wage Detail Update and Submit
• EMAC Supplement View Only
  
9. Make sure the start date is set to a date before your first check date with OnPay. (The state of Massachusetts may require you to make the current date your start date. This is fine.)
10. Click Save
11. Log into OnPay and add your ID and tax rate, then email us at hello@onpay.com, and let us know you have completed TPA access.

Power of Attorney

You will also need to grant OnPay power of attorney. To do so, please follow the instructions in this article.