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Insurance offered through OnPay Insurance Agency, LLC (CA License #0L29422)
Updated: January 4, 2023
The Land of Enchantment is an amazing place to live and run a small business. But whether you own a luxury spa in Santa Fe or the place with the best green chile in Las Cruces, you and 150,000 other New Mexico small business owners all have one dreadful thing you have to deal with: payroll taxes.
That’s what we’re here for. We designed an easy payroll calculator to ease your payroll tax burden. All you have to do is enter wage and W-4 information for each of your employees, and the calculator will do the rest. It will calculate gross pay, take out deductions, and come up with the net pay you’ll need to write your employees’ paychecks.
First and foremost, we need to give Uncle Sam his due. Below is a quick overview of what you need to know when you’re calculating federal payroll tax withholdings. If you would like to get into each calculation in detail, we invite you to check out our step-by-step guide.
Now that we’re done with federal income taxes, let’s move on to New Mexico state taxes. The state has a progressive income tax, broken down into four tax brackets ranging from 1.7% on the low end to 5.9% on the high end, which is still on the lower end compared to the rest of the country.
As an employer, you’re responsible for paying SUI (remember, if you pay your state unemployment tax in full and on time, you get a whopping 90% tax credit on your FUTA tax bill).
New Mexico’s SUI rates range from 0.33% to 6.4%. The taxable wage base in 2023 is $30,100 for each employee, up from $28,700 in 2022.
If you are a new small business owner (congratulations, by the way!), your rates range between 1% – 1.06%.
More information for new employers is available per industry here.
Both employees and employers are required to pay a Workers’ Compensation Fee.
More details on the Workers Compensation Fee can be found here.
Give yourself a pat on the back! You’ve checked “payroll taxes” off your to-do list so you can move onto the important things like growing your small business. Once each employee’s net pay is calculated (taking deductions and withholdings into consideration), you’re well on your way.
All you have to worry about is getting your employees paid on time as well as setting aside whatever you owe in FICA, unemployment taxes, and worker’s compensation. Those numbers can add up quickly if you don’t account for them.
You will need to use Form 941 to file federal taxes quarterly, and Form 940 to report your annual FUTA tax. You can pay taxes online using the EFTPS payment system. More information about employment tax due dates can be found here.
Our calculator is here to help, but of course, you can never learn enough, especially when it comes to payroll taxes. Here are some additional resources and contact information to help you run payroll:
Department of Taxation & Revenue (505) 827-0700 | Register Your Business | Wage Withholding Tax
Department of Workforce Solutions (505) 841-8405 | Office Locations | What You Should Know About UI
Try OnPay out yourself to see how easy payroll and HR can be. To get started, just share a few basic details about your business. Our team of pros will set everything up and import your employees’ information for you.