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.
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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:
- Personal Income (a.k.a. State Income Tax)
- State Unemployment Insurance (SUI)
- Worker's Compensation Assessment Fee
The below information was last updated March 1, 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 | $14.60 |
|
Tipped Minimum Wage |
$7.20 | $3.00 | $4.95 | $4.38 |
|
Actual Tip Credit |
$4.80 | $9.00 | $7.41 | $10.22 |
*The city of Santa Fe's minimum wage rate is also $14.60.
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 |
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 |
|
|
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:
|
| 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
- Department of Taxation & Revenue Businesses Homepage
- Department of Taxation & Revenue Forms and Publications Library
- Department of Workforce Solutions Employer Handbook
- Department of Workforce Solutions Unemployment Forms
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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