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:
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.
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.
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.
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:
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:
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.
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.
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.
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: