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Capital City
Lansing
Timezone
CST
(
GMT-6
)
Paid Leave
None
Income Tax
4.25%
Employer Tax
13.65%
Capital City
Lansing
Timezone
CST
(
GMT-6
)
Paid Leave
None
Income Tax
4.25%
Employer Tax
13.65%
Michigan is home to a diverse and talented workforce, especially in manufacturing, tech, and engineering. Whether you're looking for automotive experts or innovative tech minds, Michigan's talent pool is hard to beat.
Employees in Michigan enjoy a unique mix of urban and outdoor living, from bustling Detroit to the serene Great Lakes. This balance makes it easier to attract and retain happy, motivated team members.
With competitive tax incentives and business-friendly initiatives, Michigan creates an environment where companies—and their employees—can thrive together.
In Michigan, workers’ rights are protected by numerous employment and labor laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race. Here are the key things you need to know about hiring in Michigan.
To employ workers in Michigan, you’ll need both a Federal Employer Identification Number (EIN) and a Michigan Payroll Tax Number. These registrations will allow you to run payroll compliantly and make sure wages and taxes are reported correctly from day one.
In Michigan, standard working hours and overtime requirements are primarily regulated by the Fair Labor Standards Act (FLSA) and state laws.
In the U.S., an employee is generally considered full-time if they work at least 30 hours per week. The Fair Labor Standards Act (FSLA) doesn't define what full-time employment is, but does set the standard for overtime at 40 hours per week.
There is no mandated state law that specifies the duration or terms of a probation period for new employees. Instead, probationary periods are typically defined by employers’ policies and often last between 30 to 90 days, though they can extend up to six months or more depending on the employer's preference and the role's requirements.
As of 2025, Michigan’s minimum wage is:
Michigan's anti-discrimination framework is primarily governed by the Elliott-Larsen Civil Rights Act (ELCRA), enacted in 1976. This legislation prohibits discrimination in employment, housing, education, and public accommodations based on various protected characteristics.
When your team puts in more than 40 hours in a workweek, the state of Michigan expects you to compensate them at 1.5× their regular rate. This regulation sits under both state law and the federal Fair Labor Standards Act (FLSA).
This doesn't change regardless of any internal agreements in place. Overtime is mandated and non‑waivable and must be paid out in your regular payroll cycle.
Certain roles are exempt from overtime. This includes employees who:
Your team will need to pay careful attention to both state and local considerations when it comes to payroll taxes in Michigan. Let’s take a look at the key obligations.
Payroll cycles vary depending on employer preference and industry standards, but the most common types are:
Here’s a clear breakdown of the payroll taxes your company needs to manage in Michigan:
Complying with Michigan’s payroll taxes, whether you're a local or international company, is essential If you want to operate successfully within the state. If you fail to do so, you run the risk of facing significant penalties. Your business is responsible for accurately calculating, withholding, and remitting several payroll taxes.
Here's a breakdown of the key steps and requirements for payroll tax compliance in Michigan:
Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Michigan. Understanding the tax obligations for both employers and employees is crucial when operating in Michigan's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Michigan. Note that employees may be liable for additional local taxes in certain cities and jurisdictions.
Here's a quick summary of employer-specific payroll contributions:
Here's a snapshot of what employee payroll tax contributions you need to be aware of:
Based on the total Michigan state income tax liability reported during a lookback period, employers are assigned either a monthly or semi-weekly deposit schedule.
If your business expects to owe more than $800 in Michigan Business Tax (MBT) or Corporate Income Tax (CIT) however, you must make quarterly estimated payments:
Pensions are not mandatory for private-sector employers in Michigan. However, certain public sector employees may have access to mandatory pension plans.
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In Michigan, employers are required to provide certain benefits to their employees, while others are optional but commonly offered to attract and retain talent. Mandatory benefits include:
Competitive benefits are essential for attracting and retaining top talent in Michigan. 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 Michigan packages include:
Under the Affordable Care Act (ACA), employers with 50 or more full-time employees are required to offer health insurance that meets minimum essential coverage standards. Employers with fewer than 50 full-time employees are not required by law to provide health insurance.
Benefits for part-time employees largely depend on employer policy, as state and federal laws do not mandate most benefits for part-time workers. With the global job market becoming increasingly competitive, it's a good idea to build a compensation package that will both attract and retain top talent.
Employers are not required to offer a 401(k) or any other retirement plan to their employees. The decision to provide such benefits is at your descretion.
Vacation leave is not mandatory in Michigan. Employers in Michigan are not required by state law to provide paid or unpaid vacation leave, but offering it as a voluntary benefit can make your company more attractive to global talent.
Below are the mandatory leave entitlements for full-time employees in Michigan.
In Michigan, Paid Time Off (PTO) policies, including vacation time and personal days, are generally at the discretion of employers. That said, if PTO is promised in an employment contract or company policy, employers are expected to honor it consistently.
In Michigan, there is no state-mandated maternity leave. Employees rely on the federal Family and Medical Leave Act (FMLA), which provides unpaid, job-protected leave for eligible employees to care for a newborn, adopted child, or newly placed foster child. If FMLA doesn’t apply, any maternity leave would depend on the employer’s policies. Some companies may offer paid maternity leave voluntarily as a benefit.
In Michigan, there is no state-mandated paternity leave. Eligible employees may qualify for unpaid, job-protected leave under the federal Family and Medical Leave Act (FMLA) to care for a newborn, adopted child, or newly placed foster child. If FMLA doesn’t apply, any paternity leave would depend on the employer’s specific policies, as Michigan law does not provide additional leave requirements for paternity.
Under Michigan's Paid Medical Leave Act, eligible employees at larger companies can earn paid sick leave for personal or family health needs, with accrual capped at 40 hours per year.
Military leave is governed by both federal and state laws, ensuring that employees who serve in the uniformed services are granted specific rights and protections. Employers must grant a leave of absence to employees for the purpose of being inducted into or entering active service, active state service, or the service of the United States.
Michigan law prohibits employers from discharging, disciplining, or threatening employees due to jury service. Employers are also forbidden from requiring employees to work additional hours to compensate for time spent on jury duty.
Federal FMLA provisions give eligible employees up to 12 weeks of unpaid parental leave, but Michigan does not mandate paid parental leave at the state level. In practice, whether parents receive paid time off depends on the policies set by each employer, making it important to communicate clearly what support your company offers.
When it comes to terminating employment in Michigan, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.
The termination process for employees is governed by at-will employment principles, which means either the employer or the employee can terminate the employment relationship at any time, for any reason, as long as it is not illegal.
Michigan does not require employers to provide advance notice of termination unless specified in an employment contract or union agreement. Michigan law requires that employees receive their final paycheck by the next scheduled payday after termination. This includes all earned wages, including unpaid vacation if the employer's policy allows for it.
Michigan employment laws do not require employers to provide severance pay upon termination unless specified in an employment contract, company policy, or a collective bargaining agreement.
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As of 2025, Michigan’s minimum wage rates are:
Michigan law generally follows the federal definition which states 30 hours or more per week is considered full-time for benefits and Affordable Care Act (ACA) purposes. However, full-time status can vary depending on your company’s policies, union agreements, or eligibility rules for specific benefits. Always check both federal regulations and your internal HR policies when classifying employees.
In order to submit payroll taxes in Michigan, your company will need to register with the Michigan Department of Treasury to withhold the 4.25% state income tax and deposit it monthly or semi-weekly based on your assigned schedule, filing returns as required. For federal taxes, withhold Social Security, Medicare, and federal income tax, follow your federal deposit schedule, and file Form 941 quarterly. Submit state payments through the Michigan Treasury Online system and federal payments via the Electronic Federal Tax Payment System.
An Employer of Record (EOR) like Playroll makes hiring in Michigan simple by becoming the legal employer for your team members, meaning your business doesn't have to set up a legal entity. The EOR will handle compliance with Michigan labor laws, payroll processing, tax withholding, and remittance so you can focus on managing your team, not paperwork. The EOR will also manage onboarding, benefits, and ongoing HR compliance, ensuring your business stays up to date with changing wage rates, overtime rules, and tax deadlines.
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Your “everything you ever needed to know” guides to compliant employment around the United States.
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