Free New York Payroll Tax Calculator and NY Tax Rates

Updated January 14, 2021

Ninety-nine percent of all New York businesses have less than 100 employees, so you’ve got a lot of company if you’re trying to figure out payroll taxes. Whether your business cooks up the best Italian in town, makes waves on Wall Street, or picks apples upstate, this free payroll calculator can help any New York business get it right.

Just enter wage and W-4 information for each employee, and our calculator will process their gross pay, net pay, and deductions for New York and Federal taxes, as well as the taxes that you as the employer are responsible for:

See New York tax rates

Federal Payroll Taxes

Of course, New York taxes are just part of the total tax equation. Let’s go over federal payroll taxes first. Our New York payroll calculator can also help you figure out the federal payroll tax withholding for both your employees and your business.

Below is a summary of everything that goes into calculating the payroll tax for a New York employee. If you would like to see a more detailed calculation, check out our step-by-step guide here.

1. Figure out the employee’s gross wages. Gross wages represent the amount of money an employee has earned during the most recent pay period.

   a.Hourly employees: Multiply the number of hours worked in the most recent pay period by their pay rate. Make sure to calculate any overtime hours worked at the appropriate rate.

   b.Salaried employees: Divide each employee’s annual salary by the number of pay periods you have each year.

2. Deduct any pre-tax withholdings. Do your employees have a 401(k), flexible spending account (FSA), or other pre-tax deductions? If so, subtract them from gross pay before you start applying federal payroll taxes.
3. Deduct and match any FICA taxes to cover Medicare and Social Security taxes:

   a.Social Security tax: You need to withhold 6.2% of each employee’s taxable wages until they have earned $142,800 in a given calendar year. As the employer, you must match this tax.

   b.Medicare tax: Also withhold 1.45% of each employee’s taxable wages. You will need to match this tax as well. For employees who earn more than $200,000 in taxable wages, you need to withhold what’s called an Additional Medicare Tax of 0.9%. Only the employee is responsible for paying the Additional Medicare Tax.

4. Pay FUTA unemployment taxes: You as the employer are responsible for paying 6% of the first $7,000 of taxable income an employee earns annually. Note that you can claim a tax credit of up to 5.4% for paying your New York state unemployment taxes in full and on time each quarter, which means that when everything’s said and done, you’ll only have to pay 0.6% FUTA tax. Note that employees are not responsible for paying FUTA taxes.
5. Deduct federal income taxes, which can range from 0% to 37%. Withholding information can be found through the IRS.
6. Subtract any post-tax deductions: Some employees may be responsible for court-ordered wage garnishments or child support. They may also choose to make post-tax contributions to savings accounts, elective benefits (like life insurance), or other withholdings.

New York Payroll Taxes

Calculating taxes in New York is a little trickier than in other states. The state as a whole has a progressive income tax that ranges from 4.00% to 8.82%, depending on an employee’s income level. There is also a supplemental withholding rate of 9.62% for bonuses and commissions.

In New York state, an employee’s tax burden can also vary based on location. Specifically, residents of New York City or Yonkers are subject to additional income taxes:

• New York City surcharge: a 2.907% to 3.876% income tax is deducted from taxable wages.
• Yonkers surcharge: People who work in Yonkers and Yonkers residents pay a tax of less than 1%, based on a number of factors.

You can find detailed instructions on how to apply these local New York payroll taxes through the NY Department of Taxation. Taxes should be paid to the state on an ongoing basis using the following forms:

• Form NYS-1: Monthly Withholding Payment. Before you can fill out your NYS-1, you’ll need to register as a new employer.
• Form NYS-45: Quarterly Withholding Reconciliation, Wage Reporting, and Unemployment Insurance. Here are detailed instructions.

New York Unemployment Insurance

On the first $11,800 each employee earns, New York employers also pay unemployment insurance of between 0.525% and 7.825%. Certain churches and non-profits are exempt from this payment. If you’re a new employer, you’ll pay a flat rate of 3.125%. Learn more about your NY UI rate here.

New York State Disability Insurance

Along with payroll-related taxes and withholding, New York employers are also responsible for providing employees with State Disability Insurance (SDI) to cover off-the-job injury or illness. The state allows employers to withhold 0.5% of wages, but no more than $0.60 per week, from employees to help fund this policy.

Write Your Employees’ Paychecks!

You’re good enough, you’re smart enough, and gosh darn it, you’ve figured out all your payroll! Once you’ve calculated your employees’ net pay by working out all their deductions and withholdings, you’re ready to cut their checks.

In addition to making sure your employees get paid on time, don’t forget to set aside the employer taxes your company is responsible for. Those FICA and UI payments can add up if you don’t remit them on a regular basis.

Federal tax filings are due quarterly by filing Form 941 and annually by filing Form 940, but for most New York employers, taxes must be paid on an ongoing basis via the EFTPS payment system. Find detailed information from the IRS here.

Additional NY Payroll Tax Resources:

Our calculator can help you do most of the heavy lifting, but here are some additional resources and contact information you may need to start running payroll in New York:

New York Department of Taxation & Finance (withholding assistance): (518) 485-6654 | Register for Withholding Taxes

New York Department of Labor (unemployment insurance assistance): (518) 457-9000 | Register for NY Unemployment Taxes

You can also learn more about city taxes and determine the appropriate withholding rates for your employees here:

• New York City Payroll Tax
• Yonkers Withholding Tax