When it comes to running payroll in New York, paying your employees on time is just the one step. Businesses in New York also need to keep rules and regulations in mind.
At Gusto, we’ve assembled a guide to help employers understand taxes, benefits, and payroll regulations in New York.
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Key regulations New York payroll processors need to know
New York minimum wage
The New York minimum wage varies by region.
- In New York City, the minimum hourly wage is $15.
- In Long Island and Westchester, the minimum hourly wage is $13 and will increase to $14 on December 31, 2020, and on a date to be determined in 2021, the minimum wage will increase to $15.
- Throughout the rest of New York, the minimum hourly wage is $11.80, and it will increase to $12.50 on December 31, 2020.
New York pay stubs
Every time you give your employees a paycheck in New York, you must include a pay stub that details the following information:
- The pay period
- Your company’s name, address, and phone number
- Your employee’s name
- The employee’s pay rate and basis (hourly, salaried, etc.)
- Gross wages earned
- Itemized deductions withheld
- Allowances, if claimed by the employer, taken for meals, trips, lodging, or other expenses
- Net wages earned
- If applicable, overtime pay and number of regular versus overtime hours worked
New York pay periods
In New York, most employees must be paid at least semi-monthly on paydays that the employer states in advance. The state doesn’t have any requirements for the days on which you must pay your employees, and it also doesn’t set a maximum number of days between a pay period ending and payment being issued.
Three exceptions exist:
- Manual workers must be paid weekly and receive their wages at most seven calendar days after the end of the week during which they earned their wages.
- Railroad workers must be paid weekly on Thursday or an earlier weekday. Payment will include all wages earned during the seven-day period concluding on the Tuesday of the week prior to payment.
- Salespeople whose income is based on commission can be paid monthly instead of semi-monthly. They must receive all wages by the final day of the month after the month for which payment is being issued.
Determining time worked in New York
In New York, a “workweek” is any seven-day period. A New York workweek doesn’t have to run Monday through Sunday, and it can start at any time of day – it just has to span seven uninterrupted days.
New York defines “hours worked” as all hours during which employers require employees to be available for work at an employer-specified location. This definition implies that even if your employee is present on-site but is not given work to perform, their hours present still count toward hours worked.
New York overtime pay and tracking
New York requires employers to pay overtime to nonexempt employees. As outlined in the federal Fair Labor Standards Act (FLSA), overtime is paid at one and a half times an employee’s standard pay rate for all hours worked over 40 in a workweek.
New York final wage payment
In New York, employers must pay final wages to employees who have left the company – whether voluntarily or not – by the same payday that these wages would be paid if the employee had remained with the company. Employees can request that these wages be delivered via mail.
Income tax withholding in New York
In New York state, the income tax withheld from employee paychecks varies from 4% to 9.62% and increases with an employee’s income. Bonuses and commissions are taxed at a supplemental 9.62% rate.
New York employers must also withhold New York City tax from city residents and Yonkers City tax from residents and nonresidents.
New York payroll tax for employers
In New York, employers must pay the following state payroll taxes:
- New York state unemployment insurance: This tax is levied on the first $11,600 of an employee’s earnings and varies between 0.6% and 7.9%. New York’s state government determines business tax rates based on several factors, including the age and size of the business.
- New York reemployment: This tax is also levied on the first $11,600 of an employee’s wages, though at a flat rate of 0.075%.
- New York Metropolitan Commuter Transportation Mobility Tax (MCTMT): In Kings, Queens, Bronx, Richmond, Dutchess, Nassau, Suffolk, Rockland, Orange, Westchester, and New York counties, businesses with payroll expenses beyond $312,500 per calendar quarter must pay this tax at a rate of 0.11%, 0.23%, or 0.34%, depending on payroll expenses paid per quarter.
- New York disability benefits: Certain employers in New York are required to purchase disability benefits. To pay for these benefits, employers can deduct up to 60 cents per week from employee paychecks.
Additionally, New York employers must pay the following federal payroll taxes:
- Social Security
- Medicare
- Federal Unemployment Tax Act (FUTA)
New York benefits
As with all American workers, New York employees are entitled to Social Security benefits and paid family medical leave as outlined by the federal Family and Medical Leave Act (FMLA). Additional state benefits include:
- Workers’ compensation: Almost all for-profit New York businesses must provide workers’ compensation insurance, though there are some exceptions.
- Health insurance: Although New York state has no law requiring employers to offer health insurance, the federal Patient Protection and Affordable Care Act (ACA) mandates that all American employers with at least 50 full time (or equivalent) employees provide health insurance to 95% or more of their full-time workers and their dependents. Failure to do so may result in a tax penalty. Additionally, certain small businesses that choose to offer health insurance may be eligible for a tax credit.
- Overtime: In New York state, employers must pay hourly employees time and a half when they work more than 40 hours in a workweek. For certain occupations, overtime pay begins after 44 hours of work per week instead. Additionally, certain occupations not included in federal overtime obligations are subject to state overtime regulations.
- Domestic violence leave: New York requires employers to provide employees with adequate time off to tend to matters related to domestic violence against themselves or family members. Employers are required to pay for this time off until the worker’s yearly paid time-off cap is reached, after which time this leave becomes unpaid.
- Jury duty: New York employers must grant time off to, and may not dismiss, employees serving jury duty. New York employers cannot force employees to count their jury duty leave toward their annual paid time-off allowance, though employees can choose to do so.
- Paid parental leave: In 2016, New York passed statewide laws that allow for parents of newborn children or newly adopted children to receive up to 10 weeks of paid parental family leave within the first 12 months of birth or adoption.
- Sick leave: NY state does not require employers to provide paid sick leave but both New York City and Westchester County have sick leave mandates.
- Paid family leave: NY state also requires most employers to provide paid family leave and obtain paid family leave insurance.
Why is Gusto a great payroll provider in New York?
With Gusto, New York employers can run payroll from the same user-friendly dashboard where they can also administer benefits, manage employees, and more. We help you seamlessly onboard new employees, pay your team on time, and provide the resources you need to insure your team.
The onboarding process is incredibly easy and I know I don’t have to worry about constantly filing paperwork because Gusto has it all under control for me. It takes the usual payroll stress off my shoulders entirely.
Charlotte Guyton, Owner of Bard and Baker LLC
Your New York state, local, and federal payroll tax regulations are folded into our platform to help you stay compliant. We also regularly update our system to reflect the newest changes to tax laws and regulations. Our platform automatically withholds taxes from your employees’ paychecks, files your tax forms (including Forms W-2, 1099, 8974, 940, 941, and 944), and pays those taxes on your behalf with no additional fees, no matter which of our four plans you choose.
When you choose Gusto, there is no cap on how many times you run payroll, no matter your company’s size. We offer extensive customization options so you can pay everyone —full-timers, part-timers, hourly workers, independent contractors, and out-of-state remote employees—at differing rates and schedules, without limitation.
Frequently asked questions about payroll in New York
How often do New York employees get paid?
In New York, employees who perform manual labor must be paid weekly. All other workers must be paid at least semimonthly.
How much do New York employers pay in payroll taxes?
New York payroll taxes include unemployment taxes that vary between 0.825% and 8.225% and are applied to the first $11,600 of an employee’s wages. Additionally, reemployment taxes of 0.075% are levied on the first $11,600 of an employee’s wages.
Which taxes must New York businesses pay?
New York businesses must pay, state and federal unemployment tax, state reemployment tax, and federal Social Security and Medicare taxes. Certain employers must also pay disability and MCTMT taxes.
