Colorado Paycheck Highlights
- Flat Tax Rate: Colorado has a flat state income tax rate of 4.4% for 2024/2025.
- FAMLI Program: Most employees contribute 0.45% of their wages to the Family and Medical Leave Insurance program.
- Local Taxes: Some cities like Denver have Occupational Privilege Taxes (OPT) or other local withholdings.
How to Use the Colorado Paycheck Calculator
Our Colorado Paycheck Calculator is designed to provide accurate estimates of your take-home pay by factoring in federal, state, and local taxes. Whether you are a salaried employee in Denver or an hourly worker in Colorado Springs, this tool helps you understand your net income.
Follow these simple steps to get your result:
- Enter Gross Pay: Input your total earnings before any deductions. You can enter this as an annual salary, hourly rate, or pay-period amount.
- Select Pay Frequency: Choose how often you get paid (e.g., Weekly, Bi-Weekly, Semi-Monthly, Monthly).
- Filing Status: Select "Single" or "Married". While Colorado has a flat tax, your filing status significantly impacts your federal withholding.
- FAMLI Status: By default, the calculator includes the 0.45% FAMLI deduction. If your employer covers this or you are exempt, check the "Exempt from FAMLI" box.
- Local Tax: If you know you are subject to a local tax (like the Denver OPT), enter the percentage or estimated rate.
Understanding Colorado Taxes
Colorado is known for its relatively simple income tax structure compared to states with progressive brackets. However, there are specific programs and local taxes you need to be aware of.
State Income Tax (4.40%)
Colorado utilizes a flat income tax rate. For tax years 2024 and 2025, this rate is 4.40%. This means that regardless of whether you earn $30,000 or $300,000, the state tax rate applied to your taxable income remains the same. This simplifies withholding calculations significantly compared to states like California or New York.
FAMLI Program
The Family and Medical Leave Insurance (FAMLI) program is a state-run insurance program that ensures Colorado workers have access to paid leave for life circumstances like a new child, a serious health condition, or caring for a loved one.
- Total Premium: 0.9% of wages.
- Employee Share: Employers can deduct up to 0.45% (half of the premium) from your paycheck.
- Employer Share: Employers pay the other 0.45%. Small employers (fewer than 10 employees) are not required to pay the employer share, but they must still remit the employee share if they choose to participate.
Most Colorado paychecks will see this 0.45% deduction line item. It applies to wages up to the Social Security wage base.
Federal Taxes and FICA
In addition to state taxes, all Colorado employees are subject to federal taxes:
- Federal Income Tax: Calculated based on the IRS tax brackets, which are progressive. Your rate depends on your income level and filing status.
- Social Security: A flat 6.2% tax on earnings up to the wage base limit ($168,600 for 2024).
- Medicare: A flat 1.45% tax on all earnings, with no income cap. High earners may pay an Additional Medicare Tax of 0.9%.
Local Taxes in Colorado
While Colorado has a centralized state income tax, some municipalities impose their own taxes. The most common is the Occupational Privilege Tax (OPT), often called the "head tax."
Denver OPT
If you work in Denver and earn over $500 in a month, you pay a flat amount:
- Employee: $5.75 per month.
- Employer: $4.00 per month.
Other cities like Aurora, Glendale, and Greenwood Village have similar taxes. Our calculator allows you to input a percentage for local taxes if you want to estimate these costs relative to your income, though they are often flat dollar amounts.
Example Calculation
Let's look at an example of a single filer in Denver earning $60,000 annually.
| Tax Type | Rate/Calculation | Estimated Amount |
|---|---|---|
| Federal Tax | Progressive Brackets | ~$5,300 |
| FICA | 7.65% | $4,590 |
| State Tax | 4.40% | ~$2,000 |
| FAMLI | 0.45% | $270 |
| Net Pay | Take Home | ~$47,840 |
*Note: This is a simplified estimate. Actual withholdings may vary based on specific W-4 allowances and pre-tax deductions like 401(k) or health insurance.
Colorado Taxpayer Bill of Rights (TABOR) Refunds
One unique aspect of living in Colorado is the Taxpayer Bill of Rights (TABOR). This constitutional amendment limits the amount of revenue the state can retain and spend. When revenue exceeds this cap, the surplus must be returned to taxpayers.
In recent years, this has meant significant refunds for residents. For the 2024 tax year (filed in 2025), eligible full-year residents can expect a flat-amount refund, often distributed in the spring or summer. This is a nice bonus that effectively lowers your net tax rate, even though it's not reflected in your monthly paycheck withholding.
Denver and Local Minimum Wages
While the state minimum wage in Colorado is $14.42 per hour (for 2024), local jurisdictions can set higher rates.
Denver has one of the highest minimum wages in the country, set at $18.29 per hour for 2024. If you work within the city and county limits of Denver, your gross pay calculation should start with this higher baseline.
Colorado Overtime & COMPS Order
Colorado's overtime rules are governed by the COMPS Order (Colorado Overtime and Minimum Pay Standards Order).
- Weekly Overtime: 1.5x pay for hours worked over 40 in a workweek.
- Daily Overtime: 1.5x pay for hours worked over 12 in a single workday. This is a key difference from federal law, which has no daily limit.
- Rest Breaks: Employees are entitled to a paid 10-minute rest period for every 4 hours worked.
Cost of Living in Colorado
While Colorado taxes are relatively low, the cost of living—particularly housing—has risen sharply.
- Housing: The median home price in Denver and Boulder is significantly higher than the national average.
- Groceries & Utilities: Generally align with the national average, though mountain towns may see higher prices.
- Transportation: Gas prices can be volatile, and public transit is limited outside the Denver metro area.
Colorado Tax Deductions and Credits
To further lower your tax bill, don't miss these state-specific opportunities:
- Child Care Contribution Credit: A generous 50% credit for donations to qualifying child care facilities.
- Pension/Annuity Subtraction: Seniors (over 65) can deduct up to $24,000 of pension or annuity income.
- First-Time Homebuyer Savings Account: Interest earned on these designated accounts is tax-free.
Colorado Taxes on Retirement Income
Colorado offers generous treatment for retirement income, making it an attractive state for retirees and those planning for retirement:
- Social Security: Colorado fully exempts Social Security benefits from state income tax for taxpayers 65 and older. Those under 65 can deduct up to $20,000 of benefits.
- Pension and Annuity Income: Taxpayers age 55-64 can exclude up to $20,000 of pension income. Those 65 and older can exclude up to $24,000.
- 401(k) and IRA Distributions: These qualify for the pension exclusion amounts mentioned above, making Colorado a favorable state for retirement distributions.
Combined with the flat 4.40% tax rate and TABOR refunds, Colorado provides a tax-friendly environment for retirees compared to many other states.
A Deeper Look at TABOR Refunds
The Taxpayer's Bill of Rights (TABOR) is a unique feature of Colorado's constitution. It limits the amount of revenue the state can retain. Any excess revenue must be refunded to taxpayers.
Recent Refund History:
- 2024 (for tax year 2023): Flat refund of $800 for single filers, $1,600 for joint filers.
- 2023 (for tax year 2022): $750 for single filers, $1,500 for joint filers.
These refunds are substantial and can effectively offset months of state tax withholding. Our calculator focuses on your paycheck withholding, not your final tax return, so keep in mind that you might get a nice check from the state in the spring.