Article
3 min read
Your Ultimate Guide to New York Payroll
US payroll
Author
Deel Team
Published
July 26, 2023
Last Update
August 21, 2024
Table of Contents
Paying unemployment insurance in New York State
New York State unemployment tax rates
New York State withholding tax rates
Paying your re-employment service fund tax
Withholding personal income tax from your New York employee
Paying disability insurance in New York State
Withholding paid family leave from your New York employee
Paying your New York workers’ compensation
Workers compensation tax rates in NYS
Payroll tax due dates in New York State
Submission process for payroll taxes in New York State
Optional employer compensation expense program in NYS
Simplify US payroll tax compliance with Deel
Key takeaways
- Employers with employees in New York must contribute to the state unemployment insurance program.
- New York state also requires employers to contribute to the Re-Employment Service Tax Fund, State Disability Insurance, and Paid Family Leave.
- When you hire one employee in New York, you’ll need to start paying for workers’ compensation insurance in New York.
Employers must navigate various regulations and requirements to ensure proper payroll withholding in each US state. On top of withholding federal taxes such as Medicare and Social Security taxes, you are also responsible for withholding and paying certain New York state taxes from your employee’s payroll. These taxes together are referred to as employer payroll taxes or payroll withholding.
This guide introduces what employers need to pay and withhold from payroll in New York, including unemployment insurance, personal income tax, and workers' compensation.
Paying unemployment insurance in New York State
Unemployment Insurance (UI) is a national program administered by the US Department of Labor and provides temporary payments to people who are unemployed through no fault of their own. Although UI is a joint state-federal program to help unemployed individuals, employers in New Mexico must contribute to state unemployment insurance.
Unemployment insurance is paid by the employer and the rate may change from year to year. You can manage your New York payroll taxes through an online portal through the New York Department of Labor. The site also offers answers to FAQs, rate change information, and more.
New York State unemployment tax rates
The State Unemployment Insurance (SUI) tax rates in New York are experience-rated and can vary significantly between employers. These rates are determined by several factors including the employer's industry, the amount of benefits charged to the employer's account, and the employer's payroll size.
| Employer status | SUI tax rate range | Base wage limit |
|---|---|---|
| New employers | 3.2% to 4.1% | $12,000 |
| Established employers | 0.6% to 7.9% | $12,000 |
| Maximum rate | 9.9% (includes surcharges) | $12,000 |
Additional notes:
- Experience rating: New York uses an experience rating system to assign rates within this range. This system considers the amount of unemployment benefits drawn by former employees
- Base wage limit: The tax applies to the first $12,000 of each employee's earnings (as of the current year)
- Voluntary contributions: Employers may make voluntary contributions to lower their SUI tax rate if it is cost-effective for them
- Special assessments: Additional costs may include a Re-employment Service Fund or an Interest Assessment Surcharge, which are not reflected in the base SUI rate
Employers should verify their specific rate each year through their online account with the New York State Department of Labor, as these rates can change based on the employer's claims experience and the state's unemployment fund's financial health.
New York State withholding tax rates
The withholding tax rates are adjusted annually and are crucial for calculating how much employers should withhold from their employees' wages. The rates depend on the employee's earnings, tax status, allowances, and other factors.
The table below is designed to give a broad overview of the withholding rates applicable to different income brackets and filing statuses in New York State. Employers should consult the latest tax tables from the New York State Department of Taxation and Finance for precise calculations and updates. This table provides a general overview:
| Income range | Single filers | Married filing jointly | Married filing separately |
|---|---|---|---|
| Up to $8,500 | 4.00% | 4.00% | 4.00% |
| $8,501 to $11,700 | 4.50% | 4.50% | 4.50% |
| $11,701 to $13,900 | 5.25% | 5.25% | 5.25% |
| $13,901 to $21,400 | 5.90% | 5.90% | 5.90% |
| $21,401 to $80,650 | 6.33% | 6.33% | 6.33% |
| $80,651 to $215,400 | 6.57% | 6.57% | 6.57% |
| $215,401 to $1,077,550 | 6.85% | 6.85% | 6.85% |
| Over $1,077,550 | 8.82% | 8.82% | 8.82% |
Additional notes:
- Supplemental wages: If supplemental wages (like bonuses) are paid separately from regular wages, the withholding rate is a flat 11.70%
- Adjustments: These rates are subject to annual adjustments based on changes in tax legislation and economic factors
Paying your re-employment service fund tax
On top of paying your New York Unemployment Insurance, you will also have to contribute to the state’s Re-employment Service Fund. The Re-employment Service Fund develops automated programs and funds staff positions to administer unemployment insurance programs to help people who are out of work look for jobs.
This tax is based on your quarterly reporting. You can file your quarterly reporting with the New York Department of Labor. For more information on filing and contributing to the Re-employment Service Fund, the state provides a breakdown of the service.
Withholding personal income tax from your New York employee
Personal Income Tax is a tax on the income of New York residents. Personal income tax is deducted from the employee’s wages and is withheld by the employer. The New York Department of Taxation and Finance provides the following information on withholding and paying your employee’s personal income tax.
For more information on withholding personal income tax from your employee, New York provides a quick guide to who you must withhold tax for and a comprehensive Employer’s Guide to to Unemployment Insurance, Wage Reporting, and Withholding Tax.
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Paying disability insurance in New York State
The State Disability Insurance (SDI), unlike workers’ compensation, provides temporary benefit payments to workers for non-work-related illness, injury, or pregnancy. You can purchase SDI through private insurance carriers or NY State Insurance Fund (NYSIF). Please note that you cannot pass on any SDI coverage costs to your employee. The New York Workers’ Compensation Board provides a breakdown to assist you in finding disability insurance coverage.
Withholding paid family leave from your New York employee
Paid Family Leave (PFL) benefits generally extend to people who can’t work because they need to care for a seriously ill family member, bond with a new child, or participate in a qualifying event because of a family member’s military deployment. PFL is typically added onto your SDI coverage. However, unlike SDI, PFL is funded through employee payroll contributions to match the cost of coverage. The New York State website provides a thorough resource explaining the program for employers.
Paying your New York workers’ compensation
On top of paying your New York payroll taxes, you will also need to pay for workers’ compensation in the state. Workers’ compensation, unlike State Disability Insurance, is insurance for an employee’s injury while performing their job. Employers are required to pay for workers’ compensation in New York even if you only have one employee living there.
Employers can buy workers’ compensation insurance through the state fund or a commercial insurance carrier. New York State’s Workers’ Compensation Board provides tips to assist you in finding disability insurance coverage.
Please be sure that you verify that your workers’ compensation insurance is compliant with the state’s regulations for workers’ compensation.
Workers compensation tax rates in NYS
Workers' compensation rates are adjusted annually. Here are the rates for recent periods:
| Period | Maximum Weekly Benefit Rate |
|---|---|
| July 1, 2023 - June 30, 2024 | $1,145.43 |
| July 1, 2022 - June 30, 2023 | $1,125.46 |
| July 1, 2021 - June 30, 2022 | $1,063.05 |
| July 1, 1992 - June 30, 2007 | $400.00 |
These rates are based on the New York State Average Weekly Wage reported annually by the Commissioner of Labor.
Payroll tax due dates in New York State
Employers must adhere to specific due dates for filing and paying payroll taxes:
- Quarterly filings: Employers must file Form NYS-45 each quarter.
- Monthly deposits: If $700 or more is withheld, Form NYS-1 must be filed within 3 or 5 business days after the payroll that caused the accumulated tax withheld to equal or exceed $700.
Submission process for payroll taxes in New York State
New York mandates electronic filing for payroll taxes. Employers must submit their withholding tax returns electronically to avoid penalties and ensure timely processing. This can be done through the New York State Department of Taxation and Finance's online system.
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Optional employer compensation expense program in NYS
On top of paying your New York payroll taxes, you will also have the option to affirmatively opt into the Employer Compensation Expense Program. If you choose to opt into the program, you would pay a state tax on annual payroll expenses that are in excess of $40,000 per employee and eligible employees.
New York Department of Taxation and Finance provides more information about the affirmative opt-in Employer Compensation Expense Program. If you decide to opt into the program, you can file and pay your taxes for the program online.
FAQs
What should employees do if they completed a Form IT-2104 before January 1, 2023?
Employees should complete a 2023 Form IT-2104 to ensure their withholding allowances are accurate for 2023.
How should employers handle supplemental wage payments?
Supplemental wages should be withheld appropriately depending on whether they are paid separately or with regular wages.
What resources are available for employers?
Employers can access forms, publications, and updates on the New York State Department of Taxation and Finance website.
How can payroll periods be converted for withholding purposes?
Employers can use provided instructions and tables to convert payroll periods and accurately calculate withholdings.
Simplify US payroll tax compliance with Deel
While this guide provides essential information on New York payroll taxes, payroll compliance and state requirements extend beyond what is covered above. To streamline the process and ensure full compliance, companies can turn to Deel.
Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Speak with an expert today to see how you can streamline your US payroll processes and ensure compliance with state regulations.
Disclaimer: This article is provided for general informational purposes and should not be treated as legal or tax advice. Consult a professional before proceeding.
