Michigan
Michigan doesn't tax residential or commercial cleaning. The Use Tax Act does tax laundering or cleaning textiles under an agreement of at least 5 days, like a linen, mop, or mat service, except textiles used by a restaurant or retail sales business. The minimum wage is $13.73 an hour and goes to $15.00 on January 1, 2027.
The date to circle for a Michigan cleaning company is January 1, 2027, when the minimum wage moves from $13.73 to $15.00 an hour. Sales tax is a short conversation for house and office cleaning, with one textile rule that matters if you run mop or mat service. Below: sales tax, the test Michigan uses for employees and subcontractors, payroll registration, the minimum wage, and what all of it means for your books.
Residential and commercial cleaning are both not taxable in Michigan. The exception lives in the Use Tax Act. MCL 205.93a(1)(d) taxes laundering or cleaning textiles under a sale, rental, or service agreement with a term of at least 5 days, such as linen, mop, or mat service, unless the textiles are used by a restaurant or retail sales business. The full breakdown is on my page about Michigan sales tax on cleaning services.
For unemployment insurance, Michigan uses the IRS 20-factor test from Rev. Rul. 87-41 for services performed on and after January 1, 2013. The rule is in MCL 421.42(5). How each type of worker shows up in the books is in my post on 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question for your CPA or an employment attorney.
Michigan taxes wages, so employers withhold state income tax. The Michigan Department of Treasury handles withholding, and registration runs through mto.treasury.michigan.gov. Unemployment insurance is a separate account with the Michigan Unemployment Insurance Agency (UIA), part of the Department of Labor and Economic Opportunity. The UIA's employer page links to its online e-Registration application, and the agency's tax functions have moved from MiWAM to MiUI.
Source: Michigan Department of Treasury, Michigan Income Tax Withholding Guide, Form 446 (Rev. 12-20)
Source: Michigan Department of Treasury, New Business Registration
Source: Michigan Unemployment Insurance Agency, UIA Employers
The Michigan minimum wage has been $13.73 an hour since January 1, 2026. The Department of Labor and Economic Opportunity lists the next change as $15.00 an hour, effective January 1, 2027.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
Source: Michigan Department of Labor and Economic Opportunity, Wage and Hour Division, Minimum Wage
A jump to $15.00 changes the labor line on every recurring job at once. The raise itself isn't just a new number in the payroll system. It's the labor cost on each house you clean weekly, it's the margin on each office contract, it's the figure that tells you which routes still carry their weight once January arrives. I record payroll at the wage your crews are actually paid, and the job profitability estimator shows what $15.00 does to a single job. On the sales tax side, any linen, mop, or mat service gets its own income line so it never blends into cleaning revenue.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the textile work separate and payroll recorded correctly; whether a particular agreement falls under the Use Tax Act, and how anything is reported, 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 Michigan 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
Michigan's Use Tax Act reaches some linen, mop, and mat service, so that work gets its own income line, apart from house and office cleaning. Payroll goes into the books at the rate your crews are actually paid, before and after the January 2027 increase. Book a short call below and we'll get your Michigan books set for the change.
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 clean in Michigan and want your books ready before the $15.00 rate starts, send me a note and we'll go through it together. The first conversation doesn't cost anything.
