Every tax on a Denver paycheck
| Tax | Who pays | Paid to |
|---|---|---|
| Federal income tax withholding | Employee | IRS |
| Social Security and Medicare | Employee and employer | IRS |
| Federal unemployment (FUTA) | Employer | IRS |
| Colorado income tax withholding | Employee | Colorado Department of Revenue |
| Colorado unemployment insurance | Employer | Colorado Dept. of Labor and Employment |
| Colorado FAMLI premiums | Usually shared | FAMLI Division |
| Denver OPT, employee share | Employee ($5.75/mo) | City and County of Denver |
| Denver OPT, business share | Employer ($4.00/mo each) | City and County of Denver |
The OPT trap
The Denver occupational privilege tax is small per person, which is exactly why it gets missed. New businesses forget to register, owners forget that they count too, and growing companies forget to add new hires. The fix is simple: register with Denver, add OPT to your payroll setup, and include owners and managers in the business count.
New employer checklist
- Get a federal EIN and set up federal payroll tax deposits
- Register with Colorado for wage withholding and unemployment insurance
- Register for FAMLI
- Register with Denver for the occupational privilege tax
- File new-hire reports with Colorado
- Collect W-4s and I-9s, and classify workers correctly (W-2 vs. 1099)
Working outside Denver's city limits?
Aurora, Greenwood Village, Glendale and Sheridan have their own occupational privilege taxes, and the Denver Tech Center straddles several of those lines. See which neighborhoods fall where.
Common questions
What is the Denver occupational privilege tax?
A flat monthly tax for working in Denver: $5.75 per month withheld from employees who earn at least $500 from one employer in a month, plus $4.00 per month paid by the business for each taxable employee and each owner, partner or manager working in Denver.
Do remote employees owe the Denver OPT?
It depends on where the work is actually performed. Employees who don't perform work within Denver generally aren't subject to it. Review each worker's situation with your accountant.
What is Colorado FAMLI?
Colorado's paid family and medical leave program. Employers register, and premiums based on wages are generally shared between employer and employee.