Free New York paycheck calculator for hourly and salary employees 2022

New York paycheck calculation overview

Anyone who works in New York must pay state taxes. Residents of New York or Yonkers are also responsible for paying a city tax. 

Now, this is where it gets tricky. If you are a nonresident who telecommutes or owns property in the state, you will still need to pay tax on New York source income. The source income encapsulates any earnings you accumulated from work done within the state’s lines. It also includes income you received from real estate assets. 

The New York convenience rule says that if an employee works from home for their own convenience and not because their employer requires it, the IRS will consider those days of work as if they had worked from the New York office. 

Takeaway: New York generally requires nonresident telecommuters to pay source income taxes unless their employer establishes an office at their location. 

How to calculate your employee’s paycheck 

When you process payroll and distribute error-ridden paychecks, you run the risk of landing your company in legal trouble and upsetting your employees. That’s why it’s important to get it right every time. 

To reduce the chances of making a mistake, carefully enter the information your employees wrote on their W-4s when you hired them into a New York wage calculator to determine their take-home pay.

You can determine how much money to withhold from each employee’s check by using a NY paycheck calculator and following these 5 easy steps: 

1. Personal information: Enter any employee's full name and select the state where they work.
2. Payment details: Input the employee’s payment schedule, hourly wage or salary, pay type, pay date, and hours worked (if applicable). 
3. Auxiliary pay: Take note of any financial benefits like bonuses or commissions. 
4. W-4 information: Review your employee’s filing status, tax allowances, and any additional withholdings. 
5. Download: Once you’ve finalized all of the information, you can view your employee’s net vs. gross pay and paycheck deductions.  

Tip: If an employee worked overtime, you can record that information under the Overtime Worked field in the Additional Pay section. Otherwise, you can try using payroll software that can track and calculate overtime for you. 

How much is taken out for taxes in New York? 

The amount of money you take out of your employees’ paychecks depends on how much they earn and their filing status. You can find this information on the W-4 they complete when you hire them. 

Form W-4 will give you more insight into important details that can affect their tax rate, such as:

• Marital status
• Salary
• Supplementary jobs
• Additional taxes

New York income tax rate 

New York’s state income tax ranges from 4% to 10.9%. The amount you withhold from employee paychecks will depend on their tax bracket, filing status, credits, and deductions. 

NYC tax withholdings 

New York City and Yonkers are the only cities in NY that enforce a city tax. This means that residents of these cities will have additional taxes withheld from their checks each pay period. 

Nonresident employees that work in the city will still have to pay this tax. 

The tax rates for NYC are as the following percentages: 3.078, 3.762, 2.819, and 3.876. However, they are subject to change each year. 

Federal tax withholdings 

Use the information your employees report on Form W-4 when you hired them to set up accurate federal tax withholdings. 

The federal withholding rate depends on how many jobs your employee works, their marital status and dependents, and if they meet the requirements for additional deductions. 

Aside from the regular federal income tax rate, anyone who works or employs staff must pay:

• FICA taxes: Medicare and social security
• Federal income taxes: FUTA and additional Medicare tax

Employers are also responsible for paying a federal unemployment tax (FUTA). 

Employer vs employee payroll taxes

You and your employees are responsible for paying FICA taxes. 

FICA is an acronym for the Federal Insurance Contribution Act and it includes taxes for Medicare and Social Security. Every employee must pay 6.2% of their wages towards the Social Security tax on all earnings up to $147,000 each year. 

All earners will pay 1.45% towards the Medicare tax each paycheck, and there is no contribution cap.

As an employer in New York, you will pay the following taxes:

• Federal unemployment
• State unemployment
• Mobility tax (MCMT)

If you run a sole proprietorship, partnership, or an LLC, you will also be responsible for paying a self-employment tax. Meanwhile, the money you take out of employee paychecks will go towards paying their:

• Additional Medicare tax, if applicable
• City and state income taxes

If your employees telecommute, they will also pay a source income tax. 

Tip: Never use employee earnings to pay the unemployment tax. That is solely the responsibility of the employer. 

Additional deductions on New York paychecks

Aside from the standard federal deductions, you may also need to withhold certain pre-tax deductions if you offer benefits, such as: 

• Flexible Spending Account (FSA)
• Health Savings Account (HSA)
• Commuter plan
• Long-term disability insurance
• Life insurance
• 401(k) contributions
• Health insurance 
• Dental insurance
• Vision insurance
• Individual Retirement Account (IRA) 
• Wellness benefits

Note: Reach out to your accountant if you have questions about calculating pre-tax deductions for employee benefits. 

New York’s paid family leave insurance coverage

New York funds its Paid Family Leave program by deducting .511% of each employee's gross wages each pay period. The contribution cap for this program is $423.71 per year, and if employees earn less than $1,594.57 per week, the state will lower their cap. 

If you don't pay your employees on a weekly basis, the .511% will still come out of each of their paychecks. 

Workers that clock 20+ hours per week for 26 consecutive weeks (or 175 days if they work less than 20 hours per week) can start receiving money on the first day of their leave to:

• Bond with a newborn, adopted, or foster child
• Care for a family member with a serious health condition
• Assist in the home when a family member is on active military duty

New York workers receive 67% of your average weekly wages for 12 weeks with a maximum weekly payout of $1,068.36. This program also offers employee protections like:

• Job security
• Continued health insurance

New York sick leave requirements

Employers with 5 to 99 employees who have a net income of less than $1 million are legally obligated to provide a minimum of 40 hours of paid sick leave. Those with more than 100 employees on staff must offer at least 56 hours of paid sick leave per year. 

New York wage, payroll, and workers’ rights laws 

Minimum wage: As of March 31, 2021, New York’s minimum wage is $13.20 and will increase every year on December 31st until it reaches $15 per hour. The minimum wage in NYC, Long Island, and Westchester is already $15 per hour.

Employee disability coverage: New York employers must provide disability benefits to employees, even if they aren’t injured on the job. You may choose to take 60¢ a week from employee paychecks each week to offset the cost of offering up to 26 weeks of disability leave within any given 52-week period. 

Overtime: You must pay hourly workers 1.5x their regular rate if they work more than 40 hours in a week. 

Pay frequency: You must pay all employees at least once a week. However, if they’re a laborer or a non-commission salesperson, you may be legally obligated to pay them more often. You should pay all employees on a pre-set schedule. 

If you aren't cautious, your company’s payroll costs could outgrow your profits. Use an employee cost calculator to determine the total expenses your company should plan for to make sure you have enough funding before hiring additional staff. 

QuickBooks Online Payroll & Contractor Payments: Money movement services are provided by Intuit Payments Inc., licensed as a Money Transmitter by the New York State Department of Financial Services, subject to eligibility criteria, credit and application approval. For more information about Intuit Payments Inc.’s money transmission licenses, please visit: 

https://www.intuit.com/legal/licenses/payment-licenses/.