Employer of Record for Maine

While Maine is one of the smallest states by population, its workforce spans traditional industries like shipbuilding and forestry as well as growing sectors like clean energy, biotech, and tourism. Anyone looking to hire in the state should pay close attention to Maine’s earned paid leave law, wage thresholds, and overtime exemptions to stay compliant.

Do I Need An EIN Or Payroll Tax Number To Employ In Maine?

To hire employees in Maine, your company needs a Federal Employer Identification Number (EIN) from the IRS, plus registration with both Maine Revenue Services and the Department of Labor. These state registrations allow you to withhold Maine income tax and pay into the state’s Unemployment Insurance (UI) system.

Working Hours In Maine

Maine does not set a maximum number of hours employees may work in a day or week, but the state does regulate overtime and scheduling.

• Non-exempt employees must receive 1.5× their regular rate for all hours over 40 in a workweek.
• Employees cannot be required to work more than 80 hours of overtime in any consecutive two-week period, except in emergencies or certain essential industries.
• You must also provide a 30-minute unpaid meal break after six consecutive hours worked, unless the nature of the job makes it impractical.

What Is Considered Full-Time Employment In Maine?

Maine does not legally define “full-time” employment, so the standard comes from federal rules and employer policies, but under the Affordable Care Act (ACA), employees who work 30 or more hours per week (or 130 hours per month) are considered full-time for health insurance purposes.

Probation Period In Maine

There is no state-mandated probationary period in Maine. That means your company can set probation periods (often 30, 60, or 90 days) through company policy or employment contracts. During probation, new employees may not yet qualify for certain benefits, but they are still protected by all applicable state and federal labor laws, including wage, leave, and anti-discrimination rules.

Minimum Wage in Maine

As of January 1, 2025, Maine’s minimum wage is:

• $14.65 per hour. This statewide minimum wage applies to all non-exempt employees.

• Tipped employees must be paid $7.33 per hour. If tips plus this cash wage don’t average at least $14.65 per hour over the week, you as the employer must make up the difference.
• Some municipalities, including Portland and Rockland, have set a higher minimum wage of $15.50 per hour for non-tipped workers and $7.75 for tipped workers.

Read our Maine average salary guide for more.

Maine Anti-Discrimination Laws

Employees in Maine are protected from discrimination under both state and federal law. These laws state that employers may not discriminate against employees or job applicants based on:

• Race or color
• National origin or ancestry
• Religion or creed
• Sex, including pregnancy, childbirth, and related medical conditions
• Sexual orientation
• Gender identity and gender expression
• Age (40 years and older)
• Physical or mental disability
• Genetic information
• Marital status or familial status

The Maine Human Rights Act, enforced by the Maine Human Rights Commission, also prohibits harassment and retaliation against individuals who file a complaint or participate in an investigation. If there is a need, you’ll need to provide reasonable accommodations for qualified employees with disabilities and for pregnant workers unless doing so would cause undue hardship.

Overtime in Maine

In Maine, your company must pay non-exempt employees 1.5× their regular rate of pay for all hours worked over 40 in a workweek. Unlike California, Maine doesn’t require daily overtime after 8 hours, but it does limit how much overtime you can assign. Employers may not schedule more than 80 hours of overtime in any consecutive two-week period, except in emergencies or for essential operations.

Certain employees are exempt from overtime if they meet specific criteria. To qualify, they must:

• Earn at least the exemption salary threshold ($1,128 per week, or $58,656 annually, in 2025), and
• Perform duties considered executive, administrative, or professional, or
• Work in an occupation that is exempt under federal law, such as outside sales.

Payroll taxes in Maine are deductions employers must take from employees’ wages and remit to the state. These taxes fund various state programs and services, including unemployment benefits and disability insurance.  

Payroll Cycle in Maine

Maine does not mandate a specific payroll frequency, but you are required to pay employees on a regular, predictable schedule. Most employers choose a biweekly or semimonthly cycle, though weekly and monthly schedules are also permitted. Whatever cycle you set, make sure it is consistent, clearly communicated to employees, and compliant with both state and federal wage payment laws.

Types of Payroll Taxes in Maine

If you have employees in Maine, you’re responsible for several payroll taxes at both the state and federal level. Here’s a breakdown of what you’ll need to manage:

• Maine State Income Tax Withholding: A progressive tax (ranging from 5.8% to 7.15% in 2025) withheld from employee wages based on filing status and income.
• Unemployment Insurance (UI): Employer-paid contributions to the Maine Department of Labor, applied to wages up to the annual taxable wage base (varies by year). Rates depend on your company’s experience rating.
• Federal Income Tax Withholding: Based on employee elections on IRS Form W-4.
• Social Security Tax (FICA): 6.2% withheld from employee wages and matched by the employer, up to the annual federal wage base.
• Medicare Tax (FICA): 1.45% withheld from employee wages and matched by the employer, with an additional 0.9% withheld from high earners above $200,000.
• Federal Unemployment Tax (FUTA): Employer-paid tax at 6.0% on the first $7,000 of each employee’s wages (reduced with state UI credits).

Maine does not impose local payroll taxes, so compliance focuses on state withholding, UI, and federal payroll taxes.

How to Comply with Maine Payroll Taxes

Complying with payroll tax laws in Maine is all about accuracy and timing. As an employer, you’re responsible for registering, withholding, filing, and remitting the right amounts to the right agencies. Here’s what compliance looks like in practice:

1. Register with State Agencies: Get set up with Maine Revenue Services for withholding and the Department o Labor for UI contributions before running payroll.
2. Withhold Maine State Income Tax: Use the most recent state withholding tables and report quarterly using Form 941ME.
3. Pay Unemployment Insurance (UI): Calculate contributions based on your assigned rate and taxable wage base, filing quarterly via Form ME UC-1.
4. Remit Federal Taxes: Withhold federal income tax, Social Security, and Medicare from employee wages, match your FICA contributions, and report through IRS Form 941 each quarter.
5. Deposit on Schedule: Maine assigns withholding deposit frequencies (quarterly or semi-weekly) based on your prior year’s liability. Federal deposits follow your IRS lookback period.
6. Maintain Records: Keep detailed payroll and tax records for at least four years.
7. Stay Updated: Review annual changes to tax rates, UI wage bases, and exemption thresholds through official Maine and federal resources.

By staying on top of these requirements and leaning on trustworthy payroll software, you can reduce errors, avoid penalties, and ensure your Maine operations run smoothly.

Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Maine. Understanding the tax obligations for both employers and employees is crucial when operating in California's business landscape.

Employer Tax Contributions

Employers in Maine are responsible for several employment taxes, including state unemployment insurance and workers' compensation insurance.  Employer payroll contributions are generally estimated at an additional 1.97% - 12.36% on top of the employee salary in Maine.  

Employee Tax Contributions

Employee tax contributions are generally estimated at 5.8% - 7.15% of employee salary in Maine.  

Tax Due Dates in Maine

In the United States, federal income tax returns are typically due on April 15 each year. If April 15 falls on a weekend or holiday, the deadline moves to the next business day.

• State income tax withholding returns (Form 941ME) and unemployment contributions (Form ME UC-1) are generally due on a quarterly basis. April 30, July 31, October 31, and January 31.
• If your withholding liability is over $18,000 during the lookback year, you need to make your tax deposits on a semi-weekly basis, in line with your federally assigned schedule.
• Annual reporting obligations, such as filing W-2s with the IRS and Maine Revenue Services, are due by January 31 each year, aligning with federal requirements

Pension in Maine

Maine does not mandate private-sector employers to provide pension plans, meaning retirement benefits are voluntary. They are, however, increasingly being offered as a competitive advantage. Many employers provide access to 401(k) or 403(b) plans, sometimes with matching contributions, to help employees save for retirement.

Your company will have to balance compliance with state mandates and federal benefit laws while also offering competitive perks to attract and retain talent. While some employee benefits, like earned paid leave and unemployment insurance, are required, others such as health insurance or retirement plans depend on company size and policy.

Employee Benefits For Maine

Competitive benefits are essential for attracting and retaining top talent in Maine. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Maine packages include:

• Pension or 401(K)
• Vision Insurance
• Life Insurance
• Medical Insurance
• Dental Insurance
• Health Savings Plan (HSA)
• Flexible Spending Account (FSA)

Are Employers Required To Provide Health Insurance in Maine?

Maine law does not require employers to provide health insurance to their employees, but if your company has 50 or more full-time employees, you’re required under the federal Affordable Care Act (ACA), to offer affordable health coverage that meets minimum essential standards or risk federal penalties. Smaller employers on the other hand, are not obligated to provide insurance but often choose to do so as a way to attract talent.

Are Employers Required to Offer 401k in Maine?

Maine does not require private employers to offer a 401(k) or any retirement plan. That said, many companies provide access to 401(k) or similar retirement savings plans as part of their benefits package, sometimes with matching contributions.

Offering retirement benefits isn’t mandatory, but it can be a valuable tool for supporting employees’ long-term financial wellbeing and making your company more attractive in the job market.

Maine requires employers to provide certain types of leave, while others are left to company policy. Some leave benefits are unpaid, while others like Maine’s earned paid leave, give employees more flexibility for personal or family needs.

Is Vacation Leave Mandatory in Maine?

Vacation leave is not mandatory under Maine law. However, if your company chooses to provide it, the policy must be followed as written. Once earned, vacation leave may be considered wages, meaning accrued time could be payable upon termination, depending on your policy or employment agreements.

Mandatory Leave Policies in Maine

If you have more than 10 employees, your company is legally required to provide up to 40 hours of earned paid leave per year, which employees can use for any reason. In addition, Maine requires unpaid leave for certain circumstances, such as family and medical leave, jury duty, and military service.

Paid Time Off (PTO)

Maine law does not require PTO beyond the earned paid leave mandate. If you combine vacation, sick leave, and personal days into a single PTO policy, you must administer it consistently and in line with their written policies.

Maternity Leave

Expectant mothers in Maine may qualify for leave under the state’s Family Medical Leave Requirements (FMLR), which allows up to 10 weeks of unpaid leave in a two-year period for childbirth and related care. This leave also runs concurrently with federal FMLA where applicable. Beginning in 2026, Maine’s Paid Family and Medical Leave (PFML) program will provide wage replacement for maternity leave.

Paternity Leave

Fathers and non-birthing parents are covered under the same Family Medical Leave Requirements (FMLR), with up to 10 weeks of unpaid leave in a two-year period for the birth or adoption of a child. The new PFML program (effective 2026) will also provide partial wage replacement during this leave.

Paid Sick Leave

Through Maine’s earned paid leave law, employees accrue up to 40 hours of paid leave per year, which can be used for illness, medical appointments, or personal emergencies. This law applies to employers with more than 10 employees.

Military leave

Employees called to military duty are entitled to unpaid leave under both state law and the federal USERRA. Upon return, employees must be reinstated to their previous or an equivalent position with the same pay, benefits, and seniority.

Jury duty

Employers must provide employees with unpaid leave for jury service. Employees cannot be penalized, disciplined, or terminated for serving. While not required, many employers choose to offer paid jury duty leave as an additional benefit.

Parental Leave

Parental leave in Maine falls under the state’s Family Medical Leave Requirements (FMLR) and federal FMLA. Eligible employees may take up to 10 weeks of unpaid leave in a two-year period for the birth, adoption, or foster placement of a child. Starting in 2026, the PFML program will make portions of this leave paid.

When you terminate employment in Maine, you must follow state and federal rules around final pay, notice, and employee rights. Maine is an at-will employment state, which gives you flexibility, but you still have clear obligations to remain compliant.

Termination Process in Maine

As an employer, you can end an employment relationship at any time, with or without notice, as long as you don’t do so for discriminatory reasons, in retaliation, or in violation of public policy.

• Final Pay: You must issue the employee’s final paycheck on the next regular payday after termination.
• Unused Vacation: If your company policy or contracts treat vacation or PTO as wages, you must pay out any accrued balance in the final paycheck.
• Health Coverage: You must provide information about continuing health insurance coverage under COBRA or comparable state continuation rules.

Notice Period in Maine

You are not legally required to give advance notice before terminating an employee. If your policies or contracts promise a notice period, you must honor it. Employees are also not required to give notice when resigning, though many will give two weeks as a professional courtesy.

If you employ 100 or more workers, the federal WARN Act requires you to provide 60 days’ notice for mass layoffs, plant closures, or significant workforce reductions. Maine does not have its own WARN Act beyond the federal law.

Severance in Maine

You are not required to provide severance pay in Maine. However, you may choose to offer severance as part of your company policy, industry practice, or in an individual employment agreement. If you offer severance, put the terms in writing and apply them consistently to avoid legal disputes and ensure fairness.