New Mexico Wage and Payroll Tax Facts

February 05, 2024

Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of New Mexico.

Minimum wage rates in the Land of Enchantment are substantially higher than those required by the federal government under the Fair Labor Standards Act (FLSA). In fact, the overall minimum wage rate is close to double the FLSA required rate.

Moreover, Albuquerque, Bernalillo County, Las Cruces, and Santa Fe all have local minimum wage rates too. 

When it comes to processing payroll, New Mexico-based organizations must handle the following taxes in addition to those required by the federal government:

The below information was last updated January 30, 2024. It is not intended as legal or tax advice.


New Mexico Minimum Wage Rates

Wage Type

New Mexico Rates

Federal Rates

Minimum Wage

$12.00

$7.25

Tipped Minimum Wage

$3.00

$2.13

Actual Tip Credit

$9.00

$5.12

 

Wage Type

Albuquerque Rates

Bernalillo County Rates

Las Cruces Rates Santa Fe County* Rates

Minimum Wage

$12.00 (w/health benefits under $2,500 or no health benefits)
$12.00 (w/health benefits over $2,500)
$12.00 $12.36 $14.03

Tipped Minimum Wage

$7.20 $3.00 $4.95 $4.21

Actual Tip Credit

$4.80 $9.00 $7.41 $9.82

*The city of Santa Fe's minimum wage rate is also $14.03.


New Mexico State Income Tax (SIT) Rates

New Mexico's SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax.

Filing Status

Income Tax Bracket
[Over X] - [But not over Y]

2024 Income Tax Rate

Single $0 - $7,300 0.00%
$7,300 - $12,800 1.70% of excess over $7,300
$12,800 - $18,300 $93.50 + 3.20% of excess over $12,800
$18,300 - $23,300 $269.50 + 4.70% of excess over $18,300
$23,300 - $33,300 $504.50 + 4.90% of excess over $23,300
$33,300 - $49,300 $994.50 + 4.90% of excess over $33,300
$49,300 - $72,300 $1,778.50 + 4.90% of excess over $49,300
$72,300 - $132,300 $2,905.50 + 4.90% of excess over $72,300
$132,300 - $217,300 $5,845.50 + 4.90% of excess over $132,300
$217,300 or greater $10,010.50 + 5.90% of excess over $217,300
Married $0 - $14,600 0.00%
$14,600 - $22,600 1.70% of excess over $14,600
$22,600 - $30,600 $136.00 + 3.20% of excess over $22,600
$30,600 - $38,600 $392.00 + 4.70% of excess over $30,600
$38,600 - $54,600 $768.00 + 4.90% of excess over $38,600
$54,600 - $78,600 $1,552.00 + 4.90% of excess over $54,600
$78,600 - $114,600 $2,728.00 + 4.90% of excess over $78,600
$114,600 - $214,600 $4,492.00 + 4.90% of excess over $114,600
$214,600 - $329,600 $9,392.00 + 4.90% of excess over $214,600
$329,600 or greater $15,072.00 + 5.90% of excess over $329,600
Head of Household $0 - $10,950 0.00%
$10,950 - $18,950 1.70% of excess over $10,950
$18,950 - $26,950 $136.00 + 3.20% of excess over $18,950
$26,950 - $34,950 $392.00 + 4.70% of excess over $26,950
$34,950 - $50,950 $768.00 + 4.90% of excess over $34,950
$50,950 - $74,950 $1,552.00 + 4.90% of excess over $50,950
$74,950 - $110,950 $2,728.00 + 4.90% of excess over $74,950
$110,950 - $210,950 $4,492.00 + 4.90% of excess over $110,950
$210,950 - $325,950 $9,392.00 + 4.90% of excess over $210,950
$325,950 or greater $15,027.00 + 5.90% of excess over $325,950

 

Additional New Mexico SIT Details

Supplemental Withholding Computation 5.90%

Valid Filing Statuses

  • S = Single, Married; filing separately, Head of Household
  • M = Married; filing jointly

Exemptions

Number of allowances

Form W-4

None (can use Federal W-4 a second time and mark it for New Mexico if state-based allowances differ from federal allowances)

Reconciliation Frequency

Annual


New Mexico State Unemployment Insurance (SUI) Rates

SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.

New Mexico SUI Tax Details

Taxable Wage Base

$30,100

Employee Subject to Tax

No

Rates for Experienced Employers

0.33% - 6.40%

Rates for New Employers

1.00% - 1.12%

Effective Period

Calendar Year

Voluntary Contributions Allowed

Yes; must be made by March 1 of following year


New Mexico State Disability Insurance (SDI) Rates

SDI benefits are normally funded by employees through mandatory payroll deductions from each paycheck. New Mexico, however, doesn't require employers to collect an SDI tax.


Miscellaneous New Mexico Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. New Mexico currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in New Mexico pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Workers Compensation Assessment Fee

Businesses in New Mexico are required to pay a quarterly Worker's Compensation Assessment Fee for all salaried workers employed on the last working day of the quarter. The $4.30 fee is split between employee wages ($2.00) via payroll deductions and employer contributions ($2.30).

For example, if a business employed 100 workers last quarter, it would owe a $430 assessment fee. The employer would provide $230 ($2.30 x 100) of the fee, while the employees would split the remaining $200 by contributing $2.00 from each of their wages.

Paid Sick Leave (PSL) Taxes

The state of New Mexico doesn't require employers to collect PSL taxes, but it does require employers to provide such leave under the Healthy Workplaces Act.

New Mexico PSL Details

Covered Employees All full-time, part-time, and temporary employees* who worked at least 80 hours within a 12-month period.
Covered Employers All private employers
Accrual Method(s) One hour for every 30 hours worked
Carryover Maximum 64 hours
Annual Accrual Maximum 64 hours
Probationary Period None
Frontloading Allowed Yes; prorated for those employed after January 1
FAQs Healthy Workplaces Act FAQs

*Exempt employees are assumed to work 40 hours a week unless their normal workweek is less than that. In such cases, exempt employees accrue sick leave based on the hours worked during a normal workweek.

Paid Family and Medical Leave (PFML) Taxes

The state of New Mexico doesn't require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.

Local Paid Leave Programs

San Bernalillo County also requires employers with two or more employees to provide those employees with paid time off (PTO) under its Employee Wellness Act (a.k.a., the Paid Time Off Ordinance).

San Bernalillo County PTO Details

Covered Employees All who work at least 56 hours for an employer whose physical premises is within the unincorporated part of Bernalillo County.
Covered Employers All with two or more employees
Accrual Method(s) One hour per 32 hours worked
Annual Accrual Maximum

Varies based on the size of the employer:

  • 2 - 10 employees = 28 hours
  • 11 - 34 employees = 44 hours
  • 35+ employees = 56 hours
Carryover Maximum No more than the annual accrual maximum
Probationary Period 90 days
FAQs Employee Wellness Act Guide

New Mexico Employer Registration

The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Taxation & Revenue Department for withholding tax topics and the Department of Workforce Solutions for unemployment tax topics.

Registration Details

Taxation & Revenue Department

Department of Workforce Solutions

Phone

(505) 827-0700 (877) 664-6984

Online Registration

Taxation & Revenue Taxpayer Access Point (TAP) Homepage Department of Workforce Solutions UI Registration

Registration Form

Business Tax Registration Form N/A

Registration Instructions

Online and paper registration options are available. Account numbers will be issued during the online process or in 6-8 weeks via mail. Online registration is required. Account numbers will be issued during the online process.

Employer Self-Service Login

Taxation & Revenue Taxpayer Access Point (TAP) Homepage Department of Workforce Solutions Employer Login

Additional New Mexico Payroll Tax Resources

 

This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, tax attorney, or advisor.

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