New York State payroll services and resources for employers

Q: What is New York's payroll tax?

New York’s payroll tax, also known as a personal income tax, can be confusing. For the state, a person’s income tax rate depends on their income level. Tax brackets range from 4% to 8.82%. And if a worker receives a bonus or commission, there’s a supplemental withholding rate of 9.62% on that income. Yonkers and New York City residents have additional income taxes to consider as well.

Q: Can you calculate payroll yourself?

You can calculate payroll yourself, but New York employers may find that the challenges outweigh the benefits. Labor laws specific to New York State versus NYC can confuse business owners and create expensive compliance mistakes. If you decide to calculate payroll on your own, pay attention to state, local, and industry laws.

Q: Why choose QuickBooks for your New York business?

Over 97% of customers agree that QuickBooks Online Payroll increases confidence by ensuring payroll is accurate and compliant.1 QuickBooks Payroll features like Auto Payroll and tax penalty protection can give New York business owners the peace of mind to focus on other priorities.

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Here’s what we’ll cover

Compensation
Withholding
Benefits
Payroll services
Resources

Payroll in New York

New York employers have a lot to consider to comply with state and local payroll laws. It’s easy for business owners to get confused because laws can also vary by city, county, and industry.

From compensation to employee benefits, here are a few highlights every New York employer should keep in mind.

Compensation

New York’s minimum wage is not consistent throughout the state, and there have been recent changes.

In December 2019, New York City (NYC) raised the minimum wage to $15 per hour for all businesses.
Nassau, Suffolk, and Westchester counties now have a minimum wage of $13 per hour, which will increase to $15 by 2021.
Across the remainder of New York State, the minimum wage is $11.80 per hour but will increase to $12.50 on December 31, 2020.

But not all of New York’s compensation laws revolve around the minimum wage.

Tipped workers and employees in the fast-food industry may be subject to different hourly rates. One NYC law requires fast-food companies to compensate employees $100 for every “clopening” shift worked—a closing shift followed by an opening shift.
Farmworkers employed by farms of a certain size are entitled to overtime pay but only after working 60 hours in a calendar week.
New York regulates the amount an employer can deduct for meals and lodging, based on its location and number of employees.

The Department of Labor enforces New York’s labor laws, and violations can result in criminal prosecution and penalties. Businesses found guilty of violating the minimum wage may be required to pay up to 200% of the unpaid wages, plus additional recompense.

New York income tax withholding

Most New York employers must withhold personal income taxes from their employees. Here is a list of qualifications to clarify which employees are included:

New York State residents earning wages even when earned outside of the state.
New York State nonresidents being paid wages for services performed within the state.
New York City residents, even when services are performed outside New York City.
Yonkers residents, even when services are performed outside Yonkers.
Yonkers nonresidents on wages paid for services performed in Yonkers.

New York self-employed individuals, independent contractors, partnerships, and LLCs must file the Unincorporated Business Tax (UBT). The UBT is a 4% flat rate on all income attributable to NYC. Self-employed individuals who work full-time in NYC must pay a 4% tax on all income, with few exceptions.

Beyond the UBT, self-employed workers and contractors in NYC also have to pay the city’s personal income taxes, federal income tax, a self-employment tax, and the New York State income tax. While that’s considerable, some individuals may qualify for certain tax credits, including one that could deduct up to 100% of their UBT.

New York employee benefits

New York offers a diverse landscape of employers, many of whom must offer competitive benefits to attract and retain their employees. Here are some of the benefits the New York laws regulate.

Sick time: New York State labor laws do not require employers to pay for any “time not worked,” including sick time. That said, New York City takes a very different approach. The following conditions apply to businesses in NYC:

All employers (including nonprofits) with five or more employees must provide paid sick leave.
Businesses with four or fewer employees must also provide sick leave but are not required to pay for that time off.
This law covers most employees, including full-time, part-time, temporary, per diem, transitional jobs program, and undocumented workers.
Employees must earn or accrue at least one hour of sick leave for every 30 hours they work, up to 40 hours of sick leave per year.
Employees can carry over any unused sick leave, up to 40 hours, into the next calendar year.

Vacation time: Again, New York State does not require employers to pay for “time not worked,” including vacations or holidays. However, if a business offers paid vacation time, they must pay out any earned hours when an employee leaves unless company policy explicitly states otherwise.

Time off to vote: Employees who are registered voters must be allowed to vote in elections. If their shift makes it difficult to vote, the employer must give them up to 2 hours of paid time off to vote.

Workers’ compensation: Virtually all employers in New York State must provide workers’ compensation coverage for their employees.

Paid family leave: In New York State, most private employers with one or more employees must obtain Paid Family Leave insurance. From there, they must collect employee contributions and complete their part of the Paid Family Leave request form when someone applies. Contractors and self-employed individuals may voluntarily opt into New York Paid Family Leave by purchasing an insurance policy.

Paid family leave provides job-protected and paid time off for these events:

To bond with a newly born, adopted, or fostered child.
To care for a family member with a serious health condition.
To assist loved ones when a spouse, domestic partner, child, or parent is deployed abroad on active military service.

Full payroll packages

There are three QuickBooks Workforce Payroll, Workforce Premium, and Workforce Elite. These ensure there’s a solution for every New York business. Check out a few of our favorite features within each product, designed to make your payroll fully compliant with New York state laws.

Workforce Payroll

Federal and state payroll taxes—including year-end filings—are calculated, filed, and paid automatically.**
Set up automatic payroll for salaried employees using direct deposit.**

Workforce Premium

Your time tracking data automatically flows into your account. You can approve timesheets, pay your team, and create invoices all in the same place.**
Free up your cash—automatically pay for workers’ comp when you run payroll. Our partner, AP Intego, can help you find the best policy for your business.**

Workforce Elite

With tax penalty protection, we’ll pay up to $25,000 if you receive a payroll tax penalty. It doesn’t matter who made the error. We’ll make it right.
Pay your team when you want with same-day direct deposit.** Funds are withdrawn the day your employees get paid.

See plans & pricing

State resources

New York’s official website, NY.gov, offers a variety of labor law resources on topics ranging from minimum wage to paid family leave to the state’s recordkeeping requirements. But other state resources can provide additional clarity:

Federal resources

The U.S. Department of Labor will be most applicable for employers looking for federal information and assistance. Notable resources include:

The Small Business Administration (SBA) also has resources for new and existing businesses. Small Business Development Centers are located around the country. In 2020, the SBA was well known for its coronavirus relief programs, which provided loans to struggling businesses.

QuickBooks Workforce resources

The QuickBooks Resource Center has several resources geared toward answering small business owners’ payroll questions. Additional resources include:

Frequently asked questions

What is New York's payroll tax?

Can you calculate payroll yourself?

Why choose QuickBooks for your New York business?

Guarantee

QuickBooks Workforce – tax penalty protection: Only QuickBooks Workforce Elite users are eligible to receive the tax penalty protection. If you receive a tax notice and send it to us within 15 days of the tax notice we will cover the payroll tax penalty, up to $25,000. Intuit cannot help resolve notices for customers in Collections with the IRS because IRS Collections will only work with businesses directly. Additional conditions and restrictions apply. Learn more about tax penalty protection.

**Features

Automated tax payments and filings: Automated tax payments and filing are available only for state and federal taxes. Enrollment in e-services is required. Local taxes require the user to print the forms and upload them to the necessary local sites. QuickBooks Workforce Payroll does not offer local tax payments and filings. Automatic filings for state new hire paperwork are available in QuickBooks Workforce Premium and Elite only.

Auto payroll: Available if the setup for employees and the company is complete, all employees are salaried employees, all employees are set up on direct deposit, bank verification and e-services are enabled, the account has not been on hold in the last 6 months, and the first payroll has been run successfully.

QuickBooks Time tracking: Additional fees may apply. Time tracking included in the QuickBooks Workforce Premium and Elite subscription services. Features vary. The QuickBooks Time mobile app works with iPhones, iPads, and Android phones and tablets. Devices sold separately; data plan required. Not all features are available on the mobile app and mobile browser. QuickBooks Time mobile access is included with your QuickBooks Workforce Premium and Elite subscription at no additional cost. Data access is subject to cellular/internet provider network availability and occasional downtime due to system and server maintenance and events beyond your control. Product registration is required.

Workers’ comp & business insurance: Benefits are powered by ERGO NEXT Insurance and require acceptance of ERGO NEXT's Privacy Policy and Terms of Use. Additional fees apply. Eligibility criteria applies to transfer active insurance policy broker of record, including insurance carrier, policy renewal date, and payment method. Workers compensation insurance is not available in OH, ND, WA and WY.

Same-day direct deposit: Available to QuickBooks Workforce Premium and Elite users. Payroll processed before 7 AM PT shall arrive the same business day (excluding weekends and holidays). Requires setup of direct deposit and bank verification. Same-day direct deposit may be subject to eligibility criteria. Deposit delays may vary because of third-party delays, risk reviews, or issues beyond Intuit’s control. Same-day direct deposit is available only for employees.

Claims

QuickBooks Workforce is the No. 1 payroll provider for small businesses: Based on the overall number of customers for QuickBooks Workforce products as of June 2020.