After becoming experienced rated, contribution rates will be set based on the employer’s benefit ratio. The benefit ratio is measured by dividing the employer’s claims experience over the previous three years by the employer’s taxable payroll over the same time period. The resulting benefit ratio is then multiplied by a “reserve factor,” which is set by the Department of Workforce Solutions based on the solvency of the Unemployment Trust Fund. The “reserve factor” can be as low as 0.5 and as high as 4.0. For Calendar year 2022, the reserve factor is 2.64370.
New Mexico Paycheck Calculator
Use New Mexico Paycheck Calculator to estimate net or “take home” pay for salaried employees. Simply input salary details, benefits and deductions, and any other necessary information as prompted below, and let our tool handle the rest.
Where are you employed?
How much do you get paid annual?
How often are you paid?
What is your federal filing status?
Children under 17 and students under 24
All other dependents
Where do you live?
Benefits and Deductions
Federal Income Tax
Alabama State Tax
What Are Payroll Taxes?
Payroll taxes withheld from employee paychecks fund Social Security and Medicare, to which the employer also makes payroll tax contributions.
The Social Security tax is paid by both the employee and the employer at a rate of 6.2% of the employee’s wages. The Medicare tax is also paid by both employee and employer, but at a rate of 1.45%.
Employers are also required to pay taxes under the Federal Unemployment Tax Act (FUTA) and the State Unemployment Tax Act (SUTA). The employer must also collect federal income tax from employee paychecks, and pay that amount to the IRS. The rate is determined by the employee’s tax bracket.
Each state also has specific state payroll taxes that must be withheld and paid.
New Mexico Payroll Taxes
There are two New Mexico employer payroll taxes to keep track of in addition to Social Security and Medicare.
Employers contribute to a state unemployment tax account (SUTA) and employees pay state income tax.
Under SUTA, companies must allocate a portion of their payroll taxes toward the state’s unemployment program, which pays out benefits to the unemployed until they find a new job or the predetermined benefit runs out.
In New Mexico SUTA is paid on the first $28,700 of annual per-employee income. Rates are determined as follows:
New employer tax rates are based on industry.
You can find more information on the New Mexico Department of Workforce Solutions website.
State Income Tax
New Mexico state income tax rates are based on income, as detailed on the New Mexico Department of Taxation and Revenue website.
Paying Payroll Taxes
Just as you need an EIN to pay federal payroll taxes, in New Mexico, you’ll need to register for state withholdings with the Taxation and Revenue Department, and for SUTA taxes, with the Department of Workforce Solutions.
To pay these taxes you’ll log into these sites. Withholdings taxes are due by the 25th of the month following the end of the reporting period. SUTA taxes are due quarterly.
Your municipality may also require certain tax registrations, so be sure to check with your local government for requirements.
Using a Payroll Tax Service
In New Mexico, payroll and payroll taxes come with countless laws and restrictions, which is why many business owners turn to a payroll service provider to ensure their business remains fully compliant. It’s usually less expensive than creating a new staff position for managing payroll, and relatively easy.
You’ll just send over your digital timesheets and relevant information, and the service provider will take care of the calculations, payments, and taxes, freeing you up to focus on growing your business.
We highly recommend hiring a payroll service — as a busy entrepreneur, you won’t regret it!