New Mexico payroll taxes
Every tax withheld from a New Mexico paycheck or paid by the employer in 2026, with rates and wage limits.
Last verified November 2, 2026. Sources: oui.doleta.gov, taxfoundation.org, oregon.gov.
| Tax | Employee pays | Employer pays | Wage limit |
|---|---|---|---|
| Social Security | 6.2% | 6.2% | $184,500 |
| Medicare | 1.45%* | 1.45% | No limit |
| FUTA | — | 0.6% | $7,000 |
| New Mexico SUTA | — | 1% (new) | $34,800 |
| New Mexico income tax | 1.5%–5.9% | — | — |
*Plus 0.9% Additional Medicare Tax withheld on wages over $200,000. FUTA rate shown is net of the state credit.
State unemployment insurance
New Mexico charges new employers 1% on the first $34,800 each employee earns in a year. After a few years, the rate is based on the employer's layoff history and ranges from 0.33% to 6.4%. The new employer rate is the greater of 1.0% or the industry average (about 1.0%-1.28%). One vendor listed a $30,600 wage base, but DOL, Equifax and Nextep say $34,800.
Workers' compensation fee is separate. No other UI levy was itemized.
Register and file with the New Mexico unemployment tax agency.
Income tax withholding
New Mexico has a graduated income tax with 6 brackets, from 1.5% up to 5.9% on taxable income over $210,000 for single filers.
Frequently asked questions
- What payroll taxes do employers pay in New Mexico?
- Social Security, Medicare, federal unemployment (FUTA) and New Mexico unemployment insurance (SUTA).
- What is the New Mexico SUTA wage base for 2026?
- $34,800 per employee.
- Does New Mexico require state income tax withholding?
- Yes. Employers withhold New Mexico income tax based on the employee's state withholding certificate or federal W-4.