New York Wage and Payroll Tax Facts
June 16, 2023
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 York.
Not only does the state have a unique minimum wage rate compared to the rate required by the federal government, New York is one of the few states with a State Disability Insurance program. Moreover, it also has a paid family leave program for employees within its borders.
When it comes to processing payroll, New York-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)
- State Disability Insurance (SDI)
- Paid Family Leave (PFL)
- Local income taxes in New York City and Yonkers
- Metropolitan Commuter Transportation Mobility Tax (MCTMT)
The below information was last updated June 16, 2023. It is not intended as legal or tax advice.
New York Minimum Wage Rates
| Wage Type |
Federal Rates |
|
|
Minimum Wage |
$14.20 |
$7.25 |
|
Tipped Minimum Wage |
$11.85 (Service) |
$2.13 |
|
Actual Tip Credit |
$2.35 (Service) |
$5.12 |
| Wage Type |
Federal Rates |
|
|
Minimum Wage |
$14.20 |
$7.25 |
|
Tipped Minimum Wage |
$11.85 (Service) |
$2.13 |
|
Actual Tip Credit |
$2.35 (Service) |
$5.12 |
| Wage Type |
Long Island / New York City / Westchester Rates |
|
Minimum Wage |
$15.00 |
|
Tipped Minimum Wage |
$12.50 (Service) |
|
Actual Tip Credit |
$2.50 (Service) |
| Wage Type |
Long Island / New York City / Westchester Rates |
|
Minimum Wage |
$15.00 |
|
Tipped Minimum Wage |
$12.50 (Service) |
|
Actual Tip Credit |
$2.50 (Service) |
New York State Income Tax (SIT) Rates
New York SIT is progressive, meaning it adjusts based on the income level of the employee paying the tax, and varies by region. To calculate New York SIT depends on the following:
- If the New York state-adjusted gross income is more than $107,650, use the state's tax computation worksheet for residents or nonresident employees.
- If the New York state-adjusted gross income is less than $107,650 and the state taxable income is $65,000 or more, use the applicable tax rate schedules for residents or nonresident employees based on filing status (e.g., married filing jointly, single or married filing separately, etc.)
- If the New York state-adjusted gross income is less than $107,650 and the state taxable income is less than $65,000, use the state's tax tables for residents or nonresident employees.
There are also supplemental withholdings for supplemental income (e.g., bonuses and commissions), which similarly vary based on jurisdiction.
|
Additional New York SIT Details |
|
|
Supplemental Withholding Computation |
Flat rate depending on jurisdiction:
|
|
Valid Filing Statuses |
|
|
Exemptions |
Number of Allowances |
|
Form W-4 |
|
|
Reconciliation Frequency |
Quarterly |
|
Additional New York SIT Details |
|
|
Supplemental Withholding Computation |
Flat rate depending on jurisdiction:
|
|
Valid Filing Statuses |
|
|
Exemptions |
Number of Allowances |
|
Form W-4 |
|
|
Reconciliation Frequency |
Quarterly |
New York 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 York SUI Tax Details |
|
|
Taxable Wage Base |
$12,300 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
2.1% – 9.9% |
|
Rates for New Employers |
4.1% |
|
Period Effective |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be paid by March 31 of the following year |
|
New York SUI Tax Details |
|
|
Taxable Wage Base |
$12,300 |
|
Employee Subject to Tax |
No |
|
Rates for Experienced Employers |
2.1% – 9.9% |
|
Rates for New Employers |
4.1% |
|
Period Effective |
Calendar Year |
|
Voluntary Contributions Allowed |
Yes; must be paid by March 31 of the following year |
New York State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. While employers do not contribute to these deductions, they are required to collect and remit said deductions to the state on each employee’s behalf.
|
New York SDI Tax Details |
|
|
Maximum Taxable Earnings |
N/A |
|
Employee Deduction Rate |
0.5% |
|
Maximum Employee Deduction Amount |
|
|
Employer Contribution |
Remaining costs after employee contributions are applied. |
|
New York SDI Tax Details |
|
|
Maximum Taxable Earnings |
N/A |
|
Employee Deduction Rate |
0.5% |
|
Maximum Employee Deduction Amount |
|
|
Employer Contribution |
Remaining costs after employee contributions are applied. |
Miscellaneous New York Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. New York currently has no reciprocal agreements with any other states.
Paid Sick Leave (PSL)
The state of New York doesn’t require employers to collect PSL taxes but does have a program providing such leave to eligible employees:
|
New York PSL Details |
|
|
Covered Employees |
All private-sector employees in the state, regardless of industry, occupation, part-time status, and overtime exempt status. This includes employees of charter schools, private schools, and not-for-profit corporations. |
|
Accrual Method(s) |
A rate no less than one hour of leave per 30 hours worked |
|
Annual Accrual Cap |
|
|
Probationary Period |
None |
|
Frontloading Allowed |
Yes |
|
FAQ |
|
|
New York PSL Details |
|
|
Covered Employees |
All private-sector employees in the state, regardless of industry, occupation, part-time status, and overtime exempt status. This includes employees of charter schools, private schools, and not-for-profit corporations. |
|
Accrual Method(s) |
A rate no less than one hour of leave per 30 hours worked |
|
Annual Accrual Cap |
|
|
Probationary Period |
None |
|
Frontloading Allowed |
Yes |
|
FAQ |
|
In addition to the state’s paid sick leave program, New York City and Westchester County also have local Paid Sick Leave and Safe Time Leave (STL) programs respectively.
|
PSL Requirements |
New York City PSL Details |
Westchester County STL Details |
|
Covered Employees |
Most employees who work in New York City. |
Employees employed in the county for more than 90 days in a calendar year on a full-time or part-time basis, who are victims of domestic violence (including family offense matters) or human trafficking. |
|
Accrual Method(s) |
One hour for every 30 hours worked |
N/A |
|
Annual Accrual Cap |
N/A |
|
|
Annual Use Cap |
40 hours* |
40 hours** |
|
Frontloading Allowed |
Yes |
Yes |
|
Carryover Allowed |
Yes |
N/A |
|
FAQ |
|
PSL Requirements |
New York City PSL Details |
Westchester County STL Details |
|
Covered Employees |
Most employees who work in New York City. |
Employees employed in the county for more than 90 days in a calendar year on a full-time or part-time basis, who are victims of domestic violence (including family offense matters) or human trafficking. |
|
Accrual Method(s) |
One hour for every 30 hours worked |
N/A |
|
Annual Accrual Cap |
N/A |
|
|
Annual Use Cap |
40 hours* |
40 hours** |
|
Frontloading Allowed |
Yes |
Yes |
|
Carryover Allowed |
Yes |
N/A |
|
FAQ |
*Unless the employer opts to give the employee more time.
**Covered employees may take up to 40 hours total in any calendar year or “year” defined by the employer.
Employees covered by New York City’s Paid Sick Leave include:
- Full-time and part-time employees
- Domestic workers
- Temporary and seasonal employees
- Per diem and on-call employees
- Transitional jobs program employees
- Undocumented employees
- Employees who are family members but not owners
- Employees who live outside of New York City but work in New York City
- Owners who are considered employees under New York State Labor Law
Paid Family Leave (PFL) Taxes
Like SDI, PFL is a benefit funded via mandatory payroll deductions. In New York, this deduction is 0.455% of an employee's wages up to an annual total of $399.43.
New York Local Taxes
In addition to the state-wide taxes mentioned above, the following cities and localities also have unique income taxes:
- New York City also requires a 4.25% income tax from its residents.
- Yonkers also requires a 1.959575% income tax from its residents and a 0.50% income tax from nonresidents who work in the area.
Metropolitan Commuter Transportation Mobility Taxes (MCTMT)
The MCTMT is a quarterly tax applied to certain employers and self-employed workers who do business in the Metropolitan Commuter Transportation District (MCTD). This area consists of the five boroughs of New York City and the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester. As of July 1, 2023, the MCTD is split into two zones, each with tiered tax rates based on an employer's quarterly payroll:
- Zone 1: Manhattan, Bronx, Brooklyn, Queens, and Staten Island
- Zone 2: Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester counties
|
Quarterly Payroll |
Zone 1 Tax Rates |
Zone 2 Tax Rates |
| Over $0 - $375,000 | 0.11% | 0.11% |
|
$375,001 - $437,500 |
0.23% | 0.23% |
|
Over $437,500 |
0.60% | 0.34% |
|
Quarterly Payroll |
Zone 1 Tax Rates |
Zone 2 Tax Rates |
| Over $0 - $375,000 | 0.11% | 0.11% |
|
$375,001 - $437,500 |
0.23% | 0.23% |
|
Over $437,500 |
0.60% | 0.34% |
New York Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Taxation and Finance for withholding tax topics and the Department of Labor for unemployment tax topics.
|
Registration Details |
Department of Taxation & Finance |
Department of Labor |
|
Phone |
(518) 485-6654 |
(888) 899-8810 |
|
Online Registration |
https://www.businessexpress.ny.gov/app/answers/cms/a_id/3033 |
|
|
Phone Registration |
(888) 899-8810 |
N/A |
|
Registration Instructions |
Employers can register online or by phone, and account number(s) will be issued within 10 days. Note, there will be separate account numbers for each tax type under the combined registration. |
|
|
Registration Details |
Department of Taxation & Finance |
Department of Labor |
|
Phone |
(518) 485-6654 |
(888) 899-8810 |
|
Online Registration |
https://www.businessexpress.ny.gov/app/answers/cms/a_id/3033 |
|
|
Phone Registration |
(888) 899-8810 |
N/A |
|
Registration Instructions |
Employers can register online or by phone, and account number(s) will be issued within 10 days. Note, there will be separate account numbers for each tax type under the combined registration. |
|
Additional New York Payroll Tax Resources
- Department of Taxation and Finance
- Employer Registration for Unemployment Insurance
- Tax Rate Lookup Tool
- Withholding Tax Publications
- 2021–2022 Withholding Tax Forms (current period)
- Resources for Withholding Tax Filers
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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