Navigating Payroll for April 2025: Key Filing Deadlines, Changes, and Important Considerations for Colorado Employers
As we move into the second quarter of 2025, it’s crucial for Colorado employers to stay on top of their payroll responsibilities, including tax filings, wage reports, and compliance with changing laws. April is a significant month for quarterly filings and understanding how your unemployment premiums, wages, and other important elements evolve during the year can help streamline your payroll processes.
Let’s dive into some of the key payroll-related items you should focus on this April.
First Quarter Payroll Filings: Key Reports and Payments Due
April marks the deadline for several important first-quarter filings. As you prepare for these filings, it’s essential to understand the specific reports and payments that need to be submitted to state and federal agencies. Here’s a rundown of the key filings for Colorado employers:
FUTA (Federal Unemployment Tax Act) Payments
Federal Unemployment Tax (FUTA) is paid quarterly, with the first quarter’s payment due by April 30th. FUTA tax is calculated on the first $7,000 of each employee’s wages for the year. Employers are responsible for paying FUTA tax at a rate of 6.0%, though they may be eligible for a credit of up to 5.4% for state unemployment taxes paid, which effectively reduces the rate to 0.6%.
It’s essential to double-check your records and ensure that you’ve correctly calculated FUTA payments for each employee, especially if you have a large number of new hires in the first quarter.
SUTA (State Unemployment Tax Act) Payments
In Colorado, employers are required to pay State Unemployment Tax (SUTA), which funds the state’s unemployment insurance program. This payment is also due quarterly. Your SUTA tax rate is determined by your business’s experience rating, which can fluctuate depending on factors like the size of your payroll and your claim history.
For new employers in Colorado, the state assigns a default rate for your first few years, which can be adjusted once your business’s history is established.
Paid Family and Medical Leave (PFML) Contributions
In Colorado, employers are also responsible for remitting payments to the state’s Paid Family and Medical Leave Insurance program (PFMLI). This program provides paid leave for employees who need time off for qualifying reasons, such as the birth of a child or caring for a seriously ill family member.
Employers must withhold and remit contributions on a quarterly basis, with payments due for the first quarter of 2025 by April 30th. Be sure that both the employer and employee portions of the PFML premiums are properly accounted for in your payroll system.
Quarterly Wage Reports
As part of your quarterly filing process, don’t forget to submit your quarterly wage reports, which provide detailed information about employee wages, taxes withheld, and other relevant payroll data. These reports are crucial for both FUTA and SUTA filings and must be submitted to the appropriate state and federal agencies in a timely manner.
Understanding the Impact of Unemployment Premiums Early in the Year
One of the notable features of unemployment insurance premiums is the way they work with the wage base cap. The wage base cap is the maximum amount of an employee’s wages that are subject to unemployment taxes. At the beginning of the year, this wage base cap is lower, meaning that employers pay a higher percentage of their total payroll for unemployment taxes.
Why Are Unemployment Premiums Higher in the Beginning of the Year?
In most states, including Colorado, the wage base cap resets at the beginning of the year. This means that for the first few months of the year, employers are responsible for paying unemployment premiums on a larger portion of employee wages. As the year progresses, once employees reach the wage base cap, employers are no longer required to pay unemployment taxes on wages above that amount.
In 2025, Colorado’s SUTA wage base cap is set at $15,500. This means that any employee earning over $15,500 in the first quarter will not have unemployment premiums deducted on those wages once the cap is reached. However, the higher premium rate at the beginning of the year can be a financial burden for some businesses, so it’s helpful to keep this in mind when planning payroll budgets and cash flow.
Key Changes for Employers to Note in 2025
The year 2025 has brought several important changes to payroll laws and regulations. Understanding these adjustments will help you stay compliant and avoid any payroll missteps.
Minimum Wage Increases
As of January 1, 2025, Colorado’s minimum wage increased to $14.81 per hour, and the tipped minimum wage increased to $11.79 per hour. These adjustments are part of the state’s ongoing effort to increase wages in line with the cost of living and inflation.
For employers, this means that you must ensure all employees, including tipped employees, are paid at least the new minimum wage. If you have employees who work primarily for tips, it’s essential to adjust your payroll systems to reflect these changes.
For businesses with a mix of full-time, part-time, or seasonal employees, it’s also a good time to review compensation practices to ensure you’re meeting the new wage standards for all workers.
Federal Mileage Reimbursement Rate
Another important change to be aware of is the 2025 federal mileage reimbursement rate, which has been set at $0.70 per mile. If you have employees who use their personal vehicles for business purposes, you’ll need to adjust your reimbursement rates accordingly. The IRS sets the mileage reimbursement rate each year based on factors like the price of fuel, wear and tear on vehicles, and other related costs.
Employers who reimburse employees for mileage should update their payroll processes to ensure compliance with the new rate and avoid under-reimbursement.
Other Payroll Compliance Changes
Aside from the adjustments mentioned above, it’s important to stay updated on other potential changes, including adjustments to local taxes, benefits offerings, and more. Each year, there may be updates to the Employee Retirement Income Security Act (ERISA), tax laws, or health insurance mandates, so staying informed is crucial to remaining compliant.
Wrapping Up: Tips for a Smooth April Payroll
As you prepare for payroll filings in April 2025, here are some tips to help ensure a smooth process:
Review all first-quarter filings: Double-check your FUTA, SUTA, and PFML contributions to avoid late penalties.
Update your payroll system for new wage rates: Adjust for Colorado’s minimum wage increase and ensure tipped employees are paid correctly.
Track mileage reimbursements: If you reimburse employees for mileage, make sure to update the rate to the new $0.70 per mile standard.
Plan for unemployment premiums: Be aware of the higher unemployment premiums at the beginning of the year due to the wage base cap reset.
By staying proactive and keeping up with regulatory changes, you can ensure that your payroll processes run smoothly throughout the year.
April 2025 is a pivotal month for employers in Colorado, with several important filings and adjustments taking place. By understanding the filing deadlines for SUTA, FUTA, and PFML, along with staying informed about wage updates and other regulatory changes, you’ll be able to keep your business in full compliance and avoid potential penalties.
Are you ready for your April payroll filings? Take the time to review your payroll processes today and make any necessary adjustments to ensure a smooth and compliant filing season.
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