Colorado has a flat state income tax rate of 4.4% on all taxable income. The rate has been gradually reduced in recent years thanks to TABOR (Taxpayer's Bill of Rights) refunds.
Colorado Flat Tax Rate
| Taxable Income | Tax Rate |
|---|---|
| All income | 4.4% |
Colorado's flat tax simplifies payroll calculations. Every dollar of taxable income is taxed at the same 4.4% rate, based on Colorado Department of Revenue guidelines.
What You'll See on Your Paystub
A Colorado worker's paystub includes both federal income tax withholding and state deductions:
| Deduction | Rate | Notes |
|---|---|---|
| Federal Income Tax | Varies | Based on W-4 and income |
| Social Security | 6.2% | Up to $181,200 wage base |
| Medicare | 1.45% | No wage limit |
| Colorado State Income Tax | 4.4% | Flat rate on all taxable income |
FAMLI Program
Colorado's Family and Medical Leave Insurance (FAMLI) program requires contributions from both employers and employees:
- Total rate: 0.9% of wages
- Employee portion: 0.45%
- Employer portion: 0.45%
- Wage cap: Social Security wage base ($181,200 in 2026)
The FAMLI deduction appears on your paystub as a separate line item. Benefits began in 2024, providing up to 12 weeks of paid leave.
Colorado Standard Deduction
Colorado uses federal taxable income as its starting point, so the federal standard deduction applies:
| Filing Status | Standard Deduction (2026) |
|---|---|
| Single | $15,420 |
| Married Filing Jointly | $30,840 |
| Head of Household | $23,130 |
Local Taxes
Some Colorado cities impose local taxes:
Occupational Privilege Tax (OPT)
Several Colorado cities charge an Occupational Privilege Tax:
| City | Employee OPT | Frequency |
|---|---|---|
| Denver | $5.75 | Monthly |
| Aurora | $2.00 | Monthly |
| Greenwood Village | $4.00 | Monthly |
Denver's OPT is $5.75 per month for employees who work in Denver, plus employers pay $4.00 per employee.
TABOR Refunds
Colorado's Taxpayer's Bill of Rights (TABOR) limits state revenue growth:
- When the state collects excess revenue, it must be refunded to taxpayers
- Refunds are typically issued as checks or direct deposits
- Recent TABOR refunds have ranged from $400 to $800 per taxpayer
- These refunds are separate from your regular paycheck
Colorado vs. Neighboring States
| State | Tax Structure | Rate |
|---|---|---|
| Colorado | Flat | 4.4% |
| Wyoming | None | 0% |
| Utah | Flat | 4.65% |
| New Mexico | Progressive | 5.9% |
| Nebraska | Progressive | 5.84% |
Comparing Take-Home Pay
Here's how a $75,000 annual salary in Colorado compares to other states:
| State | Effective Rate | Annual State Tax |
|---|---|---|
| Colorado | ~3.5% | ~$2,600 |
| Utah | ~3.8% | ~$2,850 |
| Wyoming | 0% | $0 |