Key figures
New Mexico payroll
2026, with sources
- State income tax
- 1.5% – 5.9%Graduated; six brackets from 2025, the top rate above $210,000 for a single filer.
- New-employer SUI rate
- Greater of industry average or 1%Until two years of experience; 2026 industry rates run 1.00% to 1.21% (Information 1.08%, Professional services 1.00%).
- Experienced-employer SUI rates
- 0.33% – 5.4%Plus an excess claims premium of up to 1% for employers whose rate would exceed 5.4%.
- Minimum wage
- $12.00/hrUnchanged since Jan 1, 2023; tipped employees $3.00 cash wage. Higher local rates apply.
- Santa Fe city living wage
- $15.40/hrFrom Mar 1, 2026, all employers in city limits; $17.50 from Jan 1, 2027.
- Las Cruces minimum wage
- $13.01/hrFrom Jan 1, 2026, all employers in city limits; CPI-indexed each year.
- Paid family leave program
- NoneBills failed in 2023, 2024 and 2025.
Withholding and unemployment insurance
New Mexico taxes wages on a graduated schedule from 1.5% to 5.9%. For a single filer the brackets set by HB 252 from 2025 are 1.5% on the first $5,500, 3.2% to $16,500, 4.3% to $33,500, 4.7% to $66,500, 4.9% to $210,000 and 5.9% above that. Withholding is registered under the same TRD business tax ID as gross receipts tax but reported on its own return, Form TRD-41414, which replaced the old combined CRS-1 report in 2021; it is due on the 25th of the month after the period, monthly, quarterly or semiannually as TRD assigns. Unemployment insurance is a separate DWS account; a new employer pays the greater of its industry average or 1% on the 2026 wage base of $34,800 until it has two years of history. After that, the rate follows the employer’s own benefit ratio multiplied by a reserve factor (3.6361 for 2026), within 0.33% to 5.4%, plus an excess claims premium of up to 1% for the highest-claim employers. Contribution and wage reports are due quarterly, by the last day of the month after the quarter.
Wage rules
The DWS Labor Relations Division enforces minimum wage, the Healthy Workplaces Act and wage payment. Workers’ compensation coverage rules are set by the Workers’ Compensation Administration.
- Minimum wage: $12.00 statewide ($3.00 cash wage for tipped employees).
- Santa Fe: $15.40 in the city and in the county outside city limits from March 1, 2026; the city rises to $17.50 on January 1, 2027.
- Las Cruces: $13.01 from January 1, 2026.
- Paid sick leave: 1 hour per 30 worked, up to 64 hours a year.
- No state paid family leave or disability program.
- No local payroll tax.
An example
A startup hiring its first engineer in Albuquerque registers with TRD for withholding through its combined account, opens a DWS account, reports the hire within 20 days and starts accruing sick leave from day one. The new hire also changes the company’s income tax: New Mexico payroll now appears in the apportionment formula.
Deadlines
- 25th of the month after the periodWage withholding tax return and paymentTRD-41414
- Last day of the month after the quarterUI contribution and wage report
- Within 20 days of hireNew-hire report
The federal baseline
This page covers what New Mexico adds. The federal rules underneath it apply here too.
Common questions
Does New Mexico have a paid leave program?
No. Paid family and medical leave bills have been introduced repeatedly — in 2025 HB 11 passed the House and then failed in the Senate Finance Committee — and none has become law, so there is no state program or payroll contribution. The Healthy Workplaces Act does require paid sick leave from every private employer, accruing at one hour per 30 worked, up to 64 hours a year.
What UI rate does a new employer pay?
The greater of its industry’s average contribution rate or 1%, on the first $34,800 of each employee’s 2026 wages, until it has two years of experience. For 2026 DWS sets most industries at 1.00%; Information is 1.08%. On a $100,000 salary that is $348 a year per employee at 1.00%, because only the first $34,800 is taxed.
Payroll next door
- AZArizona payrollA flat 2.5% income tax withheld at the employee’s Form A-4 election, UI on the first $8,000 of wages, a $15.15 minimum wage and earned paid sick time from the first employee.
- UTUtah payrollA flat 4.45% income tax, a $50,700 UI wage base with industry-average rates for new employers, the federal minimum wage and a 24-hour final-pay rule.
- COColorado payrollWithholding, UI and FAMLI are three accounts with three quarterly filings. FAMLI is 0.88% in 2026, and Denver adds a higher minimum wage and a monthly head tax.
- OKOklahoma payrollOklahoma withholds at up to 4.5% in 2026 and charges new employers 1.5% on a $25,000 wage base — high for the region. There is no local payroll tax or paid leave program.
- TXTexas payrollNo wage tax and no paid leave program. A Texas hire means a TWC unemployment account on a $9,000 wage base, new-hire reporting and the Payday Law’s final-pay deadlines.
How New Mexico compares
- No tax on wagesStates with no state income tax on wagesNew Mexico: withholds state income tax. 9 of 51 states are on the list.
- Paid leave payrollStates with a paid leave or disability payroll programNew Mexico: no state program. 16 of 51 states are on the list.
- Local payroll taxStates with city, county or district payroll taxesNew Mexico: state-level only. 14 of 51 states are on the list.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the New Mexico guide
- AccountingAccounting and state tax in New MexicoCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in New MexicoSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayablesPayables and contractors in New MexicoPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- ComplianceCompliance and filings in New MexicoRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in New MexicoCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
- New Mexico Legislature — HB 252 (2024), income tax brackets from 2025
- New Mexico DWS — Unemployment Insurance Tax Information (2026 wage base)
- New Mexico DWS — How UI Tax Rates Are Calculated
- New Mexico DWS — Minimum Wage Information
- City of Santa Fe — Living Wage in the City of Santa Fe
- City of Las Cruces — Minimum Wage Notice for 2026
- New Mexico DWS — Healthy Workplaces Act (paid sick leave)
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.