New York · State guide
Payroll taxes in New York, for a small business
Three layers can land on one wage: federal, New York State, and a local tax if the employee is a New York City or Yonkers resident, or earns wages that Yonkers taxes. Published . Updated .
Layer A
Federal
Income tax from the W-4, Social Security, Medicare, employer FUTA. Same bones as any state. See withholding basics.
Layer B
New York State
Income-tax withholding from Form IT-2104 and the 2026 tables. Unemployment contributions on the first $17,600. A quarterly NYS-45 carries both.
Layer C
City
New York City resident tax, and Yonkers resident or nonresident tax, when the facts match. NYC withholding tables did not change for 2026. Yonkers tables did.
Register once, then file a combined return
A New York employer usually needs a withholding identification number and an unemployment insurance registration. Withholding and wage reporting are administered with the Department of Taxation and Finance. Unemployment insurance is administered with the Department of Labor. The form that joins them each quarter is the NYS-45, Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return. File it even when a tax happens to be zero. Electronic filing is the normal path. The instructions say the return is required whether or not the wages are subject to contributions or to personal income tax withholding.
You still file federal Form 941 and, annually, Form 940 and Forms W-2. New York does not replace those. Put the NYS-45 on the same calendar as Form 941 so a quiet month does not hide a state wage report. Deposit dates for New York withholding follow the state’s own schedule, which can be more frequent than you expect once the withheld amount grows. Read the prompt in your online account rather than assuming the federal monthly date covers New York.
Withholding in 2026 uses new state tables
Employees complete Form IT-2104, not only the federal W-4. The two forms answer different governments. For payrolls paid on or after 1 January 2026, New York revised the state withholding tables and the Yonkers tables to reflect rate changes in the Tax Law. The Tax Department’s note says the New York City wage-bracket tables and exact calculation method did not change, and that employers should keep using Publication NYS-50-T-NYC. If someone on your team completed an IT-2104 before 2026 using the allowance worksheet, ask them to look at the 2026 form. Allowances and extra dollar amounts can be wrong for the new schedules even when the person’s life did not change.
Supplemental wages, such as a bonus paid separately, can be withheld at the flat New York State supplemental rate of 11.70% when you already withhold income tax from regular wages. You can instead aggregate the bonus with regular wages and subtract tax already withheld. If you did not withhold state income tax from regular wages, use the aggregate method. Federal supplemental withholding is a different percentage, described in Publication 15, commonly 22% up to $1 million of supplemental wages. Run both calculations. Do not use the federal flat rate as a substitute for the New York one.
Residency decides the city lines. New York City personal income tax withholding applies to New York City residents. Yonkers has a resident tax and a nonresident earnings tax. An employee who works in the city and lives elsewhere may owe state tax on those wages and not owe New York City tax. An employee who lives in the city and works outside it can still be a city resident for withholding. Follow IT-2104 and Publication NYS-50. Do not guess from the office address alone.
New York’s convenience rule can pull a nonresident’s wages back into New York when the person works outside the state for their own convenience rather than because the employer needs the work done there. It is a real rule with a real body of exceptions, and it is too fact-specific for a checkbox on this page. If you have a remote employee assigned to a New York office, read the Tax Department’s current guidance before you withhold only one state. The multi-state guide sets out the questions to ask.
Minimum wage from 1 January 2026
The Attorney General’s workplace-rights summary and the U.S. Department of Labor’s state table both show two geographies. Tipped rates below are the cash wage the employer pays before tips. Tip credits only work when the employer follows the wage order for that industry.
| Place of work | Basic hourly | Tipped service, cash wage | Tipped food service, cash wage |
|---|---|---|---|
| New York City, Nassau, Suffolk, and Westchester | $17.00 | $14.15 | $11.35 |
| Remainder of New York State | $16.00 | $13.30 | $10.70 |
Greenlawn, where this publication sits, is in Suffolk County, so the $17.00 row is the local one for work performed there. A shop in the same company upstate can be on the $16.00 row. Pay the rate for the place the hour was worked.
Paid Family Leave, employee-funded
For 2026, covered employees contribute 0.432% of gross wages each pay period. The annual cap is $411.91. The benefit is 67% of the employee’s average weekly wage, capped at 67% of the New York State average weekly wage. The state sets that average at $1,833.63 for 2026, so the maximum weekly benefit is $1,228.53. Someone earning $1,000 a week contributes about $4.32 that week and, if they take leave, the benefit example on the state’s page is $670 a week.
Withhold the contribution only up to the cap. It is not an employer match. It is also not a substitute for the statutory short-term disability coverage employers provide under the Disability Benefits Law. The employee share of disability coverage has a long-standing statutory ceiling, often described as one-half of one percent of wages and not more than $0.60 a week, with the employer paying the rest of the premium. Confirm the deduction against the policy and the Workers’ Compensation Board before you copy a penny amount into the payroll system.
Unemployment on $17,600
Beginning in 2026, the unemployment insurance wage base is $17,600 for each employee. The Department of Labor describes the ongoing rule as 18% of the state average annual wage, rounded up to the next $100, and not lower than the year before. That is a large step up from the 2025 base of $12,800. Contributions are owed on remuneration up to the base, including bonuses, tips, and commissions, and they are an employer cost.
The department’s 2026 rate table shows a new-employer total of 4.1%, made up of a 4.025% UI rate and a 0.075% Re-employment Services Fund rate. The same table shows totals from 1.7% to 9.5%, including that fund rate. On a full $17,600, 4.1% is $721.60. Your rate notice can differ if you bought a business or already have experience. Use the notice. The NYS-45 has separate lines for the UI contribution and the re-employment services fund.
Pay frequency and the wage statement
New York tells you how often to pay, not only how much tax to withhold. Clerical and other non-manual workers are commonly paid at least semimonthly. Manual workers have historically been weekly, with statutory exceptions that have been amended in recent years. Match the cycle to the current text of Labor Law section 191 and to the wage order for the industry before you pick a biweekly schedule because the software defaulted to it.
Labor Law section 195 lists what a wage statement must contain. In practice the statement shows the employer’s name, address, and phone number, the pay period, the employee’s name, hours for non-exempt work, rates including overtime, gross wages, deductions, allowances claimed as part of the minimum wage, and net wages. Build the stub from the statute, not from a generic template labeled “New York” by a vendor in another state.
Employers with payroll expense in the Metropolitan Commuter Transportation District can also owe the Metropolitan Commuter Transportation Mobility Tax. That district includes New York City and the counties of Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, and Westchester. MCTMT is an employer tax on payroll expense. It is not withheld from employees. The rate depends on the size of that payroll expense, and the brackets have changed. Use the Tax Department’s current chart for the quarter. Do not bury the tax inside “payroll taxes withheld” on the pay stub.
A practical order of work
- Confirm where each person works and where they live. The second fact drives NYC and Yonkers withholding. The first fact drives unemployment and, often, state withholding.
- Collect Form W-4 and a 2026 Form IT-2104.
- Load the 2026 state and, if needed, city or Yonkers tables. Do not keep 2025 state tables for pay dates in 2026.
- Set the minimum wage from the county, not from the company’s headquarters.
- Add the Paid Family Leave percentage with a stop at $411.91 for the year, and the disability deduction your policy allows.
- Accrue unemployment on wages up to $17,600 at the rate on your notice, plus the 0.075% re-employment services fund if your account is contributory.
- Check whether MCTMT applies to this quarter’s payroll expense.
- File NYS-45, Form 941, and the wage listing. Pay people on the lawful cycle, with a statement that matches section 195.
New York will charge interest and penalties when withholding is late. This page cannot tell you the penalty on a given day. The agency calculator and your notice can. For a lighter state income-tax picture, read Florida or Texas. For a different four-tax state system, read California.