what is new york state payroll tax

2 min read 02-11-2024

What is New York State Payroll Tax?

New York State has a complex system of payroll taxes, including income tax, disability insurance, unemployment insurance, and more. Understanding these taxes is crucial for employers to comply with state regulations and for employees to understand their earnings.

New York State Payroll Taxes Explained

Here's a breakdown of some of the major payroll taxes in New York State:

1. New York State Income Tax:

What it is: This is a progressive tax, meaning the higher your income, the higher the tax rate. Rates vary depending on your taxable income, ranging from 4% to 10.9%.
Who pays it: Both employers and employees contribute to this tax.
How it works: Employers withhold income tax from employee paychecks and submit it to the state.

2. New York State Disability Insurance:

What it is: This program provides temporary income replacement for eligible workers who become disabled.
Who pays it: Employees contribute to this tax.
How it works: Employees pay a fixed rate of 0.5% of their wages, up to a maximum taxable wage.

3. New York State Unemployment Insurance:

What it is: This program provides temporary financial assistance to eligible workers who lose their jobs through no fault of their own.
Who pays it: Employers contribute to this tax.
How it works: Employers pay a tax rate based on their unemployment experience.

4. New York State Paid Family Leave:

What it is: This program provides eligible workers with paid leave for certain family-related reasons, such as bonding with a newborn child or caring for a sick family member.
Who pays it: Employees contribute to this tax.
How it works: Employees pay a small portion of their earnings to fund this program.

5. New York City Payroll Mobility Tax:

What it is: This tax applies to businesses with a New York City payroll of $1 million or more.
Who pays it: Employers pay this tax.
How it works: Businesses are taxed on the portion of their payroll exceeding $1 million. The tax rate varies based on the amount of payroll.

Payroll Tax Resources for Employers

New York State Department of Labor (DOL): This is the primary resource for information on payroll taxes, including tax rates, filing instructions, and payment deadlines. (www.labor.ny.gov)
New York State Department of Taxation and Finance: This website provides information on income tax withholding, filing requirements, and other relevant topics. (www.tax.ny.gov)
New York City Department of Finance: This website contains information on the City Payroll Mobility Tax, including tax rates and filing requirements. (www.nyc.gov/finance)

Payroll Tax Tips for Employers

Stay organized: Keep accurate records of employee earnings and withholdings.
File on time: Failure to file payroll taxes on time can result in penalties.
Stay informed: Regularly check for changes in tax laws and regulations.
Consult with a tax professional: If you have questions about payroll taxes, consult a tax professional who can provide tailored advice.

Understanding the complexities of New York State payroll taxes is crucial for both employers and employees. By following these guidelines and utilizing available resources, businesses can ensure compliance and employees can better understand their earnings and withholdings.

what is new york state payroll tax