Free New Mexico Payroll Tax Calculator

For 2025, New Mexico employers must navigate both federal and state payroll tax requirements, including Social Security, Medicare, FUTA, state income tax withholding, SUI, and a workers’ compensation assessment. Key 2025 changes include a Social Security wage base increase to $176,100, a SUI taxable wage base rise to $33,200, and the July 1 implementation of H.B. 218, which raises the monthly deposit threshold and mandates universal electronic filing of withholding reports and W-2s. Anticipate further developments such as Paid Family and Medical Leave proposals and expiring federal provisions from the TCJA.

Understanding Payroll Tax Obligations in New Mexico

Defining Payroll Taxes: Federal and State Context

Payroll taxes fund social insurance and state services. Federally, they support Social Security, Medicare, and unemployment benefits. In New Mexico, employers also withhold state income tax, contribute to SUI, and collect a workers’ compensation assessment fee. Though employers legally remit these taxes, economic incidence often shifts part of the cost to employees through wage adjustments.

Employer Responsibilities: Registration, Withholding, Remitting, and Reporting

Employers must register with the New Mexico Taxation & Revenue Department for income tax withholding and with the New Mexico Department of Workforce Solutions for SUI. They must accurately withhold federal and state taxes, deposit them per prescribed schedules, file quarterly and annual reports, and issue Forms W-2 to employees and agencies.

Federal Payroll Taxes Applicable to New Mexico Employers

Social Security Tax (OASDI)

Rate: 6.2% employer and 6.2% employee on wages up to $176,100 for 2025. The maximum annual employee contribution is $10,918.20, matched by employers.

Medicare Tax (including Additional Medicare Tax)

Rate: 1.45% employer and 1.45% employee on all wages. An additional 0.9% is withheld on employee wages over $200,000 per year (no employer match).

Federal Unemployment Tax Act (FUTA)

Rate: 6.0% on the first $7,000 of wages per employee, employer-only. A full state tax credit (5.4%) reduces the net rate to 0.6% ($42 max), incentivizing timely SUI payments.

Tax Type	Employee Rate	Employer Rate	2025 Wage Base	Max Annual Employee Tax
Social Security (OASDI)	6.2%	6.2%	$176,100	$10,918.20
Medicare	1.45%	1.45%	No Limit	No Limit
Additional Medicare Tax	0.9% (>$200,000)	—	No Limit	No Limit
FUTA (net)	—	0.6%	$7,000	—

New Mexico State-Specific Payroll Taxes

State Income Tax (SIT) Withholding

New Mexico’s progressive SIT rates range up to 5.9%. Withholding is based on federal Form W-4 allowances. Employers use tables from publication FYI-104 to calculate withholding. Employees may file a separate Form W-4 “For New Mexico Use” to adjust state withholding.

Single Filing Status Brackets (2025)

If Taxable Income Is	Tax Withholding
Over $0–$7,500	$0.00
Over $7,500–$13,000	1.50% of excess over $7,500
Over $13,000–$20,000	$82.50 + 3.20% of excess
Over $20,000–$24,000	$306.50 + 3.20% of excess
Over $24,000–$33,000	$434.50 + 4.30% of excess
Over $33,000–$41,000	$821.50 + 4.30% of excess
Over $41,000–$58,000	$1,165.50 + 4.70% of excess
Over $58,000–$75,000	$1,965.50 + 4.70% of excess
Over $75,000–$217,500	$2,716.50 + 4.90% of excess
Over $217,500	$9,748.00 + 5.90% of excess

State Unemployment Insurance (SUI) Tax

SUI is employer-paid only. The taxable wage base for 2025 is $33,200. New employers pay 1.00–1.18% (industry-based); experienced rates range 0.33–6.40%, adjusted by benefit experience and reserve factors. Voluntary contributions by March 1 may lower future rates.

Item	2025 Figure / Detail
Taxable Wage Base	$33,200 per employee
New Employer Rate Range	1.00%–1.18%
Experienced Employer Rate Range	0.33%–6.40%
Reserve Factor	3.5719
Experience History Factor	0.4000–1.0000
Employee Subject to Tax	No

Workers’ Compensation Assessment Fee

Quarterly fee of $4.30 per employee split between employer ($2.30, including $0.30 to the Uninsured Employers’ Fund) and employee ($2.00 withheld from wages). Separate from insurance premiums.

Component	Amount per Employee per Quarter
Employer Portion	$2.30 ($0.30 to UEF)
Employee Portion	$2.00

Significant Legislative Changes: Impact of NM H.B. 218

Revised Tax Deposit Thresholds

Effective July 1, 2025, employers with average monthly SIT liability over $500 must deposit monthly (up from $200). This may shift some employers to different schedules.

Expanded Electronic Filing Mandates

All employers must e-file withholding tax reports and Forms W-2, regardless of volume or liability.

Implications for Employers

Businesses should review deposit practices, invest in or upgrade payroll systems, and become proficient with the TRD’s TAP portal to meet new digital requirements.

Provision	Previous Rule	New Rule (from 7/1/2025)	Implication
Monthly SIT Deposit Threshold	>$200/month	>$500/month	Review deposit schedules
Withholding Report Filing	E-file optional for some	Mandatory e-file	All must use digital systems
Form W-2 Filing	Required e-file if ≥25 forms	All must e-file	Paper no longer accepted

Payroll Tax Landscape Beyond 2025: Outlook

Potential Paid Family & Medical Leave

Proposals like H.B. 11 would create employer/employee contributions and benefits by 2028, adding new payroll obligations.

Economic and Revenue Forecasts

Personal income and oil-and-gas revenues drive forecasts. Fluctuations in key sectors can affect payroll tax collections and future policy decisions.

Federal Tax Policy Considerations

Automatic TCJA expirations after 2025 could raise federal tax burdens and, via rolling conformity, increase state taxable income, affecting withholding accuracy.

State Agency Strategic Focus

The TRD and NMDWS are prioritizing digital services, education, and streamlined processes—employers must keep pace with online portals and guidance.

Key Compliance Deadlines and Resources

Important Filing and Payment Due Dates

Tax/Form	Agency	Frequency	Due Date
Form 941 (FIT, SS, Medicare)	IRS	Quarterly	Last day of month after quarter
Form 940 (FUTA)	IRS	Annually	January 31
Forms W-2	SSA & TRD	Annually	January 31
SIT Deposits	NM TRD	Per schedule	Per TRD assignment
SUI Wage & Contribution Report	NMDWS	Quarterly	Last day of following month
Workers’ Comp Fee (Form WC-1)	NM TRD	Quarterly	Last day of following month

Essential Forms and Publications

Key NM items include FYI-104 (withholding tables), Form WC-1 (Workers’ Comp Fee Return), RPD-41108 (fee instructions), and the NMDWS wage report ES-903A.

Contact Information for State Agencies

NM TRD: 1-866-285-2996 | tax.newmexico.gov/contact-us/

NMDWS UI Tax: 1-877-664-6984 | uitax.support@dws.nm.gov

Recommendations

The evolving payroll tax environment in New Mexico demands proactive planning. Embrace digital systems, monitor legislative changes, ensure accurate withholding, manage SUI experience, and engage professional advisors as needed. Clear communication with employees about deductions and deadlines will mitigate risk and strengthen compliance.