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New Mexico has a 5.9% top income tax rate, mandatory paid sick leave (Healthy Workplaces Act), and Santa Fe adds a higher local minimum wage. Rippling handles NM Taxation and Revenue, NMDWS, and sick leave compliance.
New Mexico is a Southwest economy with strengths in energy, federal government and defense (Sandia National Laboratories, Los Alamos National Laboratory, Kirtland Air Force Base), tourism, and a growing technology sector in Albuquerque. New Mexico payroll is defined by a progressive income tax (top rate 5.9%), mandatory paid sick leave under the Healthy Workplaces Act, and workers’ compensation required for 3+ employees. Santa Fe has a higher local minimum wage.
Rippling’s New Mexico payroll module provides:
| Contribution | Rate | Notes |
|---|---|---|
| FUTA | 6.0% (net 0.6%) | After SUTA credit; first $7,000 |
| NM SUI (NMDWS) | New employer 1.0% | On first $31,700 of wages (2024) |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% | No wage base limit |
| Workers’ Compensation | Varies by risk class | Required for 3+ employees (most industries) |
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| Contribution | Rate | Notes |
|---|---|---|
| Federal Income Tax | Graduated 10–37% | Per W-4 |
| Social Security | 6.2% | Up to $168,600 (2024) |
| Medicare | 1.45% + 0.9% surtax | Surtax above $200K single |
| New Mexico State Income Tax | 1.7%–5.9% | 5-bracket progressive; top rate 5.9% on income above $210,000 single (2024) |
| New Mexico Income (Single, 2024) | NM Rate |
|---|---|
| Up to $5,500 | 1.7% |
| $5,501–$11,000 | 3.2% |
| $11,001–$16,000 | 4.7% |
| $16,001–$210,000 | 4.9% |
| Above $210,000 | 5.9% |
NM withholding remitted to NM Taxation and Revenue Department. Annual RPD-41272 reconciliation.
Final Pay: New Mexico requires final pay within 5 days of termination. Accrued vacation: NM Wage Payment Act treats promised vacation as wages if the employer’s policy provides for payout.
New Mexico requires workers’ comp for employers with 3 or more employees in most industries (construction: 1+). Coverage through private insurers or the New Mexico Mutual Casualty Company. The New Mexico Workers’ Compensation Administration oversees the system.
New Mexico’s minimum wage is $12.00/hour statewide (January 2023). Albuquerque has a higher local minimum: $12.00/hour (same as state). Santa Fe: $14.60/hour (July 2024). The state minimum increases with CPI. Tip credit: $3.00/hour for tipped employees in most jurisdictions.
New Mexico passed the Healthy Workplaces Act (effective July 1, 2022) requiring all employers to provide 1 hour of paid sick leave per 30 hours worked, up to 64 hours per year (employers with 10+ employees must offer paid leave; smaller employers may offer unpaid). Leave can be used for health, domestic violence, or school emergencies. Rippling tracks NM sick leave accrual.
New Mexico’s top income tax rate is 5.9% on income above $210,000 (single, 2024). The state has 5 brackets. New Mexico’s tax profile is moderate by Western states standards. NM withholding uses state-specific tables and does not fully conform to federal W-4.
