Employer of Record for Michigan

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.

Do I Need an EIN or Payroll Tax Number To Employ 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.

Working Hours in Michigan

In Michigan, standard working hours and overtime requirements are primarily regulated by the Fair Labor Standards Act (FLSA) and state laws.

• Full-Time Work: Generally, full-time work is considered 30 hours per week.
• Part-Time Work: Typically, part-time is less than 30 hours per week, though this varies by employer.

What Is Considered Full-Time Employment in Michigan?

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.

Probation Period in Michigan

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.

Minimum Wage in Michigan

As of 2025, Michigan’s minimum wage is:

• $12.48 per hour, and $8.98 for employees under 18 years of age.
• $4.74 per hour for tipped employees
• $4.25 per hour for employees undergoing training (first 90 days for under 20 years old)

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Read our Michigan average salary guide for more.

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Michigan Anti-Discrimination Laws

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.

Overtime in Michigan

​​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:

• Earn more than the state or federal exemption threshold
• Perform a role with duties that are considered executive or managerial
• Work in a certified or licensed profession, such as law, accounting, architecture, or engineering

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 Cycle in Michigan

Payroll cycles vary depending on employer preference and industry standards, but the most common types are:

• Bi-weekly
• Semi-monthly
• Weekly
• Monthly

Types of Payroll Taxes in Michigan

Here’s a clear breakdown of the payroll taxes your company needs to manage in Michigan:

• Michigan State Income Tax (withholding): A flat rate of 4.25 % on employee wages.
• Local Income Tax: Cities like Detroit, Grand Rapids, and Lansing levy 1 % to 2.4 % on top of the state tax.
• Federal Payroll Taxes (FICA): You’re responsible for withholding Social Security, Medicare, and federal income taxes. These must be reported via IRS Forms 941 or Form W‑2.
• Unemployment Insurance (UI): You’ll pay state UI based on a rate tied to your company’s claims history and taxable wage base.
• MI Paid Family Leave / Disability Insurance: Currently, Michigan doesn’t require SDI or PFML, but keep an eye out for any local program updates.

How to Comply with Michigan Payroll Taxes

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:

• Register for Withholding: Use your FEIN to register with Michigan’s Treasury before your first payroll.
• Calculate Deductions Accurately: Use the flat 4.25 % for state withholding and check if any local income tax applies based on your employees’ jurisdictions.
• File and Deposit on Time: Withholding reports may be monthly or quarterly depending on volume. If your payments is late, you can face penalties starting at 5 %, going up to 25 %). Make sure that you keep your records for at least four years.
• Manage Federal Responsibilities: Calculate and remit FICA, file Form 941 quarterly, and issue W‑2s and W‑3s annually.
• Stay Informed: Laws evolve. Keep tabs on rate changes, UI updates, and potential new obligations via official state sources or compliance partners.

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.

Employer Tax Contributions

Here's a quick summary of employer-specific payroll contributions:

Employee Payroll Tax Contributions

Here's a snapshot of what employee payroll tax contributions you need to be aware of:

Tax Due Dates in Michigan

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:

Quarterly Estimated Payments

• Calendar-Year Filers: April 15, July 15, October 15, and January 15 (following year).
• Fiscal-Year Filers: 15th day of the first month after each quarter ends.
• Payment Requirements: Total payments must equal at least 85% of current year’s liability, with each quarter’s payment reflecting that quarter’s share.
• Safe Harbor Option: If last year’s liability was $20,000 or less, you can make four equal quarterly payments totaling 100% of the prior year’s tax.

Annual Return

• Due last day of the 4th month after your tax year ends.
• No filing or payment required if apportioned gross receipts are under $350,000.

Extensions

• You can request an extension to file (not to pay) by submitting Form 4 and paying taxes by the original due date.
• If you have a federal extension, Michigan automatically extends your deadline to the last day of the 8th month after the original due date, provided you submit the state form and pay in full on time.

Pension in Michigan

Pensions are not mandatory for private-sector employers in Michigan. However, certain public sector employees may have access to mandatory pension plans.

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:

• Workers' Compensation Insurance
• Unemployment Insurance
• Paid Medical Leave
• Overtime Pay
• Minimum wage compliance
• Family and Medical Leave

Employee Benefits For Michigan

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:

• 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 Michigan?

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.

Do Part-Time Employees Get Benefits in Michigan?

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.

Are Employers Required To Offer 401k in Michigan?

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.

Is Vacation Leave Mandatory in Michigan?

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.

What Are Mandatory Leave Entitlements in Michigan?

Below are the mandatory leave entitlements for full-time employees in Michigan.

Paid Time Off 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.

Maternity Leave In Michigan

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.

Paternity Leave In Michigan

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.

Sick Leave In Michigan

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 in Michigan

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.

Jury Duty in Michigan

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.

Parental Leave In Michigan

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.

Termination Process in Michigan

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.

Notice Period in Michigan

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.

Severance in Michigan

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.