Colorado
Residential and commercial cleaning appear not to be taxable at the state level in Colorado, an inference from a 2012 non-binding Department of Revenue letter saying the state generally doesn't tax services; home-rule city taxes weren't checked. The minimum wage is $15.16 an hour, CDLE has announced $15.71 for 2027, and Colorado has local minimum wages, Denver's among them.
Colorado's wage figures are on the move: the state rate goes up in 2027, and Denver has its own city minimum wage. The sales tax answer for cleaning, by contrast, rests on a general statement the Department of Revenue made in 2012. Below I cover sales tax, the employee test, payroll registration, the minimum wage, and what all of it means for your books.
Residential and commercial cleaning appear not to be taxable at the state level. That's inferred from the Department of Revenue's 2012 general information letter, which is non-binding and says Colorado generally doesn't tax services. No source names house cleaning or janitorial cleaning, and home-rule city taxes weren't checked. What that leaves open is on my page about Colorado sales tax on cleaning.
For unemployment insurance, Colorado uses a two-prong test: free from control and direction, and customarily engaged in an independent trade related to the service. That wording is C.R.S. 8-70-115(1)(b) as quoted by the Colorado Supreme Court in Industrial Claim Appeals Office v. Softrock Geological Services, 2014 CO 30, and the current statutory wording and subsection numbering weren't confirmed. CDLE's Notice to Workers cites C.R.S. 8-70-115. How employees and subcontractors each show up in the books is in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question for your CPA or an employment attorney.
Source: Colorado Department of Labor and Employment, Notice to Workers
Colorado taxes wages, so employers withhold state income tax, and the Colorado Department of Revenue handles registration for that through mybiz.colorado.gov or paper Form CR 0100. Unemployment insurance sits with the Colorado Department of Labor and Employment (CDLE), Unemployment Insurance Division; the MyUI Employer system itself names the agency only as CDLE and the UI Division. Registration there starts with creating an employer user account in MyUI Employer.
Source: Colorado Department of Revenue, Withholding Tax Guide
Source: Colorado Department of Revenue, Colorado Wage Withholding Tax Guide (January 2026)
Source: Colorado Department of Labor and Employment, MyUI Employer, Create an Employer User Account
Colorado's minimum wage is $15.16 an hour, which CDLE confirms as the current rate. The January 1, 2026 effective date comes from the proposed 2026 pay calculation order; the adopted version wasn't read. On August 13, 2026, CDLE announced $15.71 an hour for 2027, with a tipped rate of $12.69. Colorado also has local minimum wages, listed in CDLE's INFO #19, and I cover the Denver rate on my page on cleaning businesses in Denver.
Source: Colorado Department of Labor and Employment, Labor Standards and Statistics
Source: Colorado Department of Labor and Employment, INFO #19: Local Minimum Wages (June 17, 2025)
Local minimum wages change how labor gets recorded here. One wage rate, set once in the payroll software and never touched again. It's the worst setup for a Colorado cleaning company, because Denver work carries its own city minimum wage and a single rate hides the difference. I book labor at the wage you actually pay on each job, so city work shows its real cost. On the tax side, with cleaning apparently outside the state-level sales tax, the job is keeping service income on its own line and the invoices readable for your CPA. The job profitability estimator shows what $15.71 does to a single job.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the wages and the service income recorded accurately; whether any tax applies to your cleaning, at the state or city level, is a question for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Colorado and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Colorado's state wage moves to $15.71 in 2027, and local minimum wages like Denver's sit alongside it, so payroll gets recorded at the wage actually paid on each job rather than one blanket rate. Service income stays on its own line too, with invoices clear enough for your CPA to answer the home-rule city question. Grab a short call below and we'll get your Colorado books ready for 2027.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If you run crews in Colorado and your payroll uses one rate for every job, send me a note before the 2027 wage arrives. We'll look at it together, and the first conversation doesn't cost anything.
