Colorado paychecks in 2026: what changed

What applies to Colorado paychecks in 2026.

The changes

• New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
• Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
• Tips and overtime deductions for 2025–2028 — see below.
• Withholding rate: 4.4% on DR 1098, with a $5,500 allowance ($11,000 married filing jointly) when there's no DR 0004.
• FAMLI premium: 0.88% of wages, up to 0.44% from employees; 0.86% from January 1, 2027.
• Minimum wage: $15.16, rising to $15.71 in 2027.
• FAMLI weekly benefit cap: $1,448 from July 1, 2026.

Tips and overtime in 2026

New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).

These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.

Work out your 2026 Colorado paycheck →

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Sources

• IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
• IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
• Social Security Administration — 2026 wage base of $184,500
• IRS — tips and overtime deductions
• Colorado Department of Revenue — DR 1098, 2026 Colorado Withholding Worksheet for Employers — 4.40%; allowance $11,000 married filing jointly, $5,500 otherwise, or DR 0004 Line 2; DR 0004 Line 3 added per paycheck
• Colorado Department of Revenue — DR 1098 page (2026 form and calculator)
• Colorado Department of Revenue — DR 0004, 2026 Colorado Employee Withholding Certificate — optional; without it the employer uses the IRS W-4; Table 1 standard allowances
• Colorado Department of Revenue — DR 0004 employer resources — no DR 0004 means the DR 1098 amounts based on the IRS W-4
• Colorado Department of Revenue — Colorado Wage Withholding Tax Guide (revised January 2026) — wages subject to Colorado withholding generally include any wages subject to federal withholding
• Colorado FAMLI — Employers — 0.88% of wages, employees pay no more than 50%; wages up to the Social Security wage cap
• Colorado FAMLI — Update your employee headcount for 2026 premiums — 2026: 0.88% (10 or more employees), 0.44% (nine or fewer); employers may deduct up to 0.44% from wages
• Colorado FAMLI — Employer FAQs — premiums are post-tax deductions
• Colorado FAMLI — Rules and guidance — 0.88% falls to 0.86% from January 1, 2027
• Colorado FAMLI — Individuals and families FAQs — weekly benefit capped at $1,448 from July 1, 2026
• City and County of Denver — Tax Guide Topic 61, Occupational Privilege Taxes — employee $5.75 a month when earning $500 or more in the month; employer $4; paid once with more than one Denver employer
• Greenwood Village — Occupational Privilege Tax — $2 a month employee, $2 employer, when $250 or more is earned in the month
• Colorado Department of Labor and Employment — 2026 COMPS Order poster (wage and hour rights) — $15.16 in 2026; tip credit up to $3.02; overtime after 40 a week or 12 a day or consecutive; final pay
• Colorado Department of Labor and Employment — Minimum wage will increase to $15.71 in 2027
• Colorado Department of Labor and Employment — Paydays, pay periods and pay statements — pay periods no longer than a month or 30 days; payday within 10 days of the period's end
• Colorado Wage Act, C.R.S. § 8-4-101 et seq. (revised August 6, 2025) — § 8-4-109: final pay immediately when fired, next regular payday when you quit; penalties after a 14-day written demand