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Insurance offered through OnPay Insurance Agency, LLC (CA License #0L29422)
Updated: July 11, 2023
As one of the original 13 and the first colony to declare independence from the British, it’s no surprise that New Hampshire’s state motto is Live Free or Die. As a small business owner in the state, you share this independent spirit. You want to focus on living free and growing your small business instead of having to deal with payroll taxes. Luckily, since New Hampshire doesn’t collect state income tax, it’s one less thing that you have to worry about. But you can’t forget about federal taxes.
That’s why we’re here. We designed this handy payroll calculator with you in mind, to help you calculate your federal payroll withholdings. Simply enter wage and W-4 information for each of your employees, and our calculator will process their gross pay, net pay, and any federal deductions.
Federal payroll taxes for New Hampshire employers
Here’s a quick overview of what you need to know when you’re calculating federal payroll taxes. For a more in-depth discussion on each of the federal payroll tax items, check out our step-by-step guide.
- Gross Wages:
- For all your hourly employees, multiply their hours worked by the pay rate…and don’t forget to add any overtime hours worked!
- For all your employees on salary, divide each employee’s annual salary by the number of pay periods per year.
- Remember to add in commissions, bonuses, and tips into gross wages as well.
- Deduct Pre-Tax Withholdings if your employees contribute to 401(k), FSA, HSA, or other pre-tax withholdings. You will subtract their contributions from gross wages before applying payroll taxes.
- Deduct Federal Income Tax, which ranges from 0% to 37%. We won’t get into the nitty-gritty here, but you can find detailed withholding information through the IRS website.
- Deduct FICA Taxes (and Match):
- For Social Security tax, withhold 6.2% of each employee’s taxable wages up until they have earned a total of $160,200 for the year. As an employer, you also need to pay this tax.
- For Medicare tax, withhold 1.45% of each employee’s taxable wages up until they have reached a total earning of $200,000 for that year. You will also pay this tax. For employees who make salaries above $200,000, withhold an Additional Medicare Tax of 0.9%. Only the employee is responsible for paying the Additional Medicare Tax.
- Pay FUTA Unemployment Tax, which is 6% of the first $7,000 of taxable income for each of your employees. Only employers are responsible for paying FUTA taxes. However, if you pay state unemployment taxes on time and in full, you are eligible for a tax credit of up to 5.4%, making your FUTA tax bill effectively 0.6%. It’s a huge saving, so make sure you pay attention!
- Subtract Post-Tax Deductions, such as child support, court-ordered wage garnishments, etc. If applicable, you will receive a letter from the court stating the amount of the deduction.
New Hampshire payroll tax
New Hampshire’s income tax is pretty simple with a flat rate of 5%, and no local income taxes.
New Hampshire unemployment insurance
As an employer, you’re responsible for paying unemployment insurance. For 2023, New Hampshire unemployment insurance rates range from 0.1% to 8.5% with a taxable wage base of up to $14,000 per employee per year.
New employers should use 2.7%.
The state has the right to adjust its rates quarterly, so look out for notices to make sure you pay the right taxes each quarter.
And remember to pay your state unemployment insurance on time so that you can get the big FUTA tax credit!
Now Write Your Employees’ Paychecks!
You’re almost at the finish line! Now get your signature ready because after you’ve calculated your employees’ net pay by implementing all deductions, it’s time to write those checks.
All you have to worry about is paying your employees on time and setting aside any taxes your company is responsible for (FICA and UI payments, we’re looking at you).
You will need to fill out Forms 940 (annually) and 941 (quarterly), but if you prefer ongoing fulfillment, payment can be made via the EFTPS payment system. Find further information on employment tax due dates from the IRS here.
Do you have employees nearby too? These might be helpful.
Additional New Hampshire payroll tax resources:
If you’re still looking to fill your brain with more juicy payroll tax facts, here are some additional resources and contact information:
New Hampshire Employment Security (800) 852-3400 | Register Your New Business | Employer Forms | Employer FAQs
These rates are based on local legislation and can change at any time. Always consult a tax professional if you are unsure about your obligations.
More payroll calculators for New Hampshire businesses
Employers in New Hampshire can use the calculator at the top of this page to quickly calculate their employees’ gross pay, net pay, and deductions in a few clicks. But sometimes there’s a little more math to do before they are able to cut paychecks. For example, do you own a small business where employees earn tips from customers? Remember that you are responsible for withholding taxes from your employees’ paychecks based on the tips they receive. Also, if you have workers who leave from time to time, you may need to spend some time calculating their final paychecks. So, if you need a little more help with the number-crunching, check out some of the calculators below.