Colorado charges one rate on income, 4.40%, which is usually where the explanation stops. It should not, because the rate you actually pay is never 4.40%. It rises with your salary, and there is a second state deduction on your stub that has nothing to do with income tax at all.
On a $75,000 salary, a single filer keeps about $58,205, after $3,058 of Colorado income tax and $330 for the state’s paid leave insurance.
A flat rate that is not flat
Before the 4.40% is applied, Colorado shelters a slice of your income: $5,500 a year for most people, or $11,000 if you are married filing jointly or a qualifying surviving spouse. That fixed shelter is a larger share of a small salary than a large one, so the effective rate climbs as pay rises.
| Salary | Colorado tax | Effective rate on gross |
|---|---|---|
| $30,000 | $1,078 | 3.59% |
| $50,000 | $1,958 | 3.92% |
| $75,000 | $3,058 | 4.08% |
| $100,000 | $4,158 | 4.16% |
| $200,000 | $8,558 | 4.28% |
It never reaches 4.40%, and it never drops far below 3.5% for anyone in full time work. Colorado is mildly progressive in practice while being perfectly flat in law, which is the opposite of how flat taxes are usually described.
The 0.44% that is not income tax
FAMLI, Colorado’s family and medical leave insurance, takes a second bite. The total premium is 0.88% of your wages, split down the middle: 0.44% from you and 0.44% from your employer, on wages up to the Social Security ceiling of $184,500.
It is the line most Colorado paycheck estimates leave out, because it is not administered by the Department of Revenue and does not look like a tax. On $75,000 it is $330 a year, which is roughly a tenth of your state income tax bill arriving as a separate deduction. If you have compared an online estimate against your actual stub and found yourself short by a few hundred dollars a year, this is usually why.
Your DR 0004 is optional, and that matters
Colorado has its own withholding certificate, Form DR 0004, but unlike most states it does not require one. If you have not filed it, your employer uses the allowance that matches your federal W-4 filing status, which is the $5,500 or $11,000 above.
That default is a reasonable guess rather than your actual position. The DR 0004 exists to let you set the sheltered amount yourself, or add extra withholding per period, and it is the only lever Colorado offers. If your federal and Colorado situations differ, filing one is the fix.
What comes out of a Colorado paycheck
- Federal income tax, about $7,670 on $75,000, which your W-4 controls.
- Social Security and Medicare, $5,738. A flat 7.65%.
- Colorado income tax, $3,058. 4.40% of what is left after the allowance.
- FAMLI, $330. 0.44% of wages, stopping at $184,500.
One thing not in the calculator above: five Colorado cities levy an occupational privilege tax, which is a flat monthly fee rather than a percentage. Denver charges $5.75 a month and Greenwood Village $2. It is small, it does not scale with your salary, and it is the only local wage charge in the state.
Colorado paycheck calculator FAQ
A flat 4.40%, but it is charged on your income after a withholding allowance of $5,500, or $11,000 for married filing jointly. Because that shelter is a fixed amount, the effective rate on your gross pay rises with income: about 3.59% on $30,000 and 4.28% on $200,000.
Colorado’s family and medical leave insurance. The total premium is 0.88% of wages, half paid by you and half by your employer, so 0.44% comes off your pay. It applies to wages up to the Social Security cap of $184,500, which is $330 a year on a $75,000 salary.
No. It is optional, and without one your employer uses the allowance matching your federal W-4 filing status. File one if you want to set your own sheltered amount or add extra withholding, which is the only adjustment Colorado offers.
Not as a percentage of pay. Five cities charge an occupational privilege tax, which is a flat monthly fee: $5.75 a month in Denver and $2 in Greenwood Village, for example. It does not vary with your salary and it is not included in the calculator above.