Paycheck Calculator New Mexico - NM

Income Information

Federal Withholding

State Withholding


Additional Information


New Mexico - NM Paycheck Calculator: Hourly and Salary

New Mexico, dubbed as "Land of Enchantment," is a state located in the southwestern region of the United States of America. With a colorful history, beautiful landscape, lovely weather, this mountain state is the 36th most populous, 5th most extensive, and the 6th least densely populated state across the nation.

The laid-back lifestyle, diverse culture, sunny climate, cheap cost of living, affordable housing, adequate job opportunities, and tons of recreational opportunities, this desert state attracts a considerable flow of immigrants each year.

Got new job offers? Or planning to start a small business? Or simply mulling over to New Mexico to state a new life? No matter what are reasons to relocate, this "moving to New Mexico" guide will help you in any way. This comprehensive guide covers the following topics:

  • Things you must know before moving to New Mexico
  • New Mexico Payroll Facts
  • How to Calculate Paycheck in New Mexico? A guide to assist job seekers in comparing several job offers in terms of take-home pay and in choosing the best among them. Besides, it will also help employers to calculate employment costs for their business as well as help them to figure paycheck for each of their employees using our New Mexico Paycheck Calculator.
  • Federal and State Payroll Laws
  • Frequently Asked Questions

Things you must know before moving to New Mexico

Moving from one state or country to another is not an easy job. It's a life-changing decision that needs to be executed after a lot of research and resources to make it successful. So if you are planning a relocation to New Mexico, you must be aware of the following factors:

Cost of Living:

Listed as the 5th most affordable state in the US in the Cheapest States to Live in 2019 by World Population Review, shifting to New Mexico would reduce your living cost overall. The cost of living index for the desert state is 88.9 points, which is significantly lower than the national index of 100 points. The low cost of Housing, Health, and transportation play a vital role in an overall lower cost. In contrast, grocery, utilities, and miscellaneous expenses are almost the same as elsewhere in the country.

Cost of Housing:

The home price is affordable in the state, with the median home value of $167,600. Besides buying a house, you can also rent one, which is even more affordable in New Mexico, having the median rental expense of $679 for a single bedroom and $835 for a double bedroom. However, the housing cost may vary from location to location within the state.

Education:

Unfortunately, the state lacks to provide quality education, for which it is reported with second-worst education outcomes in the country, according to a recent article on US schools by USA Today. Though, the state houses some of the highest-rated educational institutes, including New Mexico Tech (Socorro), St. John's College (Santa Fe), Los Alamos Public Schools (Los Alamos), and Grady Municipal Schools (Grady).

Weather:

New Mexico enjoys dry and warm weather overall, with semiarid to arid continental climate as the state is covered with desert, mountains, and high plains. However, certain high altitude areas like northern mountains do get colder weather and snow.

Outdoor Activities:

New Mexico is known as "The Land of Enchantment" due to its beautiful and diverse landscape, having majestic mountains, slot canyons, fertile valleys, vast deserts, and tons of other awe-inspiring beauties, which you can explore. You can make your time memorable and exciting with hiking, climbing, rafting, skiing and cycling, and a lot more.

Moreover, you can also visit great places like Santa Fe Opera House, Chaco Canyon National Historical Park, Albuquerque International Balloon Festival, National Museum of Nuclear Science & History, and Taos Pueblo.

Business and Job Opportunities:

New Mexico secures the 47th position among the 50 states in the US for Economy, according to Economy Rankings by US News & World Report by USA Today. This ranking is based on numerous factors, including Business Environment, Employment, and growth. Moreover, the Unemployment rate here is 5.8%, which is significantly higher than the national average. Although these stats are not appealing, yet there are several jobs and business opportunities.

Some of the fastest-growing jobs include personal care assistant, physical therapist, and home health aide. Furthermore, industries like Energy (including gas and oil), Agriculture & Mining, tourism, and Aerospace & Defense also have potential here for jobs and business.


These were some of the essential factors that you must consider before taking your life-changing decision of relocating to New Mexico. Now, let's jump to our main topic of Paycheck calculation in New Mexico. But before this, you must be aware of the following New Mexico Payroll Facts:

New Mexico Payroll Facts:

  • New Mexico employees pay Federal Income tax, which is distributed in seven tax brackets depending on income level and filing status, and a rate range of 0% to 37%.
  • Both Employees and Employers pay FICA taxes, which comprise of Social Security Tax of 12.4% and Medicare of 2.9%, where the employee funds half of each tax and equal half is paid by the employer for each of its employees. Moreover, if the employee's wage exceeds $200,000 in a year, then the employee (not employer) pay Additional Medicare tax of 0.9%.
  • New Mexico employees also pay State Income Tax, which is charged at the rate of 1.70% to 4.90%, having four tax brackets depending on income level and filing status. Moreover, Supplemental Wages and Bonuses can be charged at a flat rate of 4.9%.
  • No city or county in New Mexico charges Local Income Tax.
  • Employers in New Mexico don't pay State Disability Insurance (SDI) Tax. However, they pay State Unemployment Insurance (SUI) Tax on the first taxable wage of $25,800 earned by each employee in a year. This tax is charged at the rate ranging from 0.33% to 5.4%. Though, new employers pay the greater of 1.0%-1.31% of their industry's average rate.
  • The Federal Minimum wage rate is $7.25 for employees in New Mexico, unless or otherwise exempted.
  • The State Minimum wage rate is $9.0, for non-exempted employees. The Cash Minimum wage for Tipped Employees is $2.35, with a maximum tip credit of $6.65.
  • New Mexico doesn't have a reciprocal agreement with any state, so non-residents employees working in New Mexico pay taxes to the state.
  • Employees in New Mexico, unless or otherwise exempted, are paid overtime, for excess hours they work after 40 hours in a workweek, at one and times their regular hourly rate.
  • Livable Wage in New Mexico for a single is $11.38, and for a couple (both working) with two children is $16.08, according to Massachusetts Institute of Technology.
  • The Median Household income in New Mexico, according to the US Census Bureau, is $48,059.

As we are done with relocation to New Mexico and its payroll facts, now it's time to calculate paycheck.


Step 1 - Calculating Gross Pay:

The very first step to calculating the paycheck amount is to determine Gross Pay. It is a wage that an employee earned in the last pay period.


Gross Pay is calculated differently for both hourly and salary-based employees, which is discussed in detail as follow:

Gross Pay for Hourly Employee

Hourly Employees are paid at a mutually agreed pay rate for each hour they work in a pay period. Usually Pay periods for Hourly employees are Hourly, Daily, Weekly, and Bi-Weekly. However, the Federal, State, and Local Wage law requires the employers to set the pay rate equals to or more than the defined Minimum Wage Law for the non-exempted employees.

Hourly employees are also entitled to receive overtime, for each excess hour worked after regular hours in a workday or a workweek. Remember, like Minimum wage, the employers are also required to follow Overtime wage law provided by the federal, state, and local authorities.


Note: All the relevant laws are discussed in detail ahead.

To calculate gross wage for an hourly employee:

  1. Calculate total hours worked in a Pay Period using the data from Timesheet or Timecard.
  2. Multiply Total Hours worked with the Hourly Rate (Pay Rate).
  3. Add overtime hours (if any) worked by the employee.

Quick Tip: You can also use our Timecard with overtime Calculator to calculate Gross Wage for Hourly Employee instantly.

Gross Pay for Salaried Employee

Salaried Employees are paid at the flat amount rather than on an hourly basis. The amount is usually mutually agreed as an Annual Salary, which is then paid in Semi-monthly or Monthly Pay periods.

Salaried employees are mostly exempted from overtime law. However, their salaries must be according to Federal and State Minimum Wage law.

To calculate Gross Pay for Salaried Employees:

  • Divide the "employee's salary" by "number of pay periods." For example: If the employee's annual salary is $25000 and is paid on a semi-monthly pay period, then the employee's Gross Pay would be: $25000 / 24 = $1042.

Don't forget that Supplemental Wages like Bonuses, commissions, tips, paid leaves, fringe benefits, or other taxable wages earned by the employee must be added into the Gross wages.


Step 2 – Subtracting Pre-Tax Deductions (If Any):

Once you are done with Gross Wages, it's time to subtract any Pre-Tax deductions from the gross wage to get taxable wages as Pre-tax deductions are not taxable for federal payroll taxes.

Pre-tax deductions are offered to the employees as benefits like fringe benefits, HSA plans, etc., to reduce their taxable income, hence, increasing their take-home pay amount. Remember, not all benefits are exempted from taxes, so choose the pre-tax deductions wisely.

Some of the common pre-tax deductible benefits are:

  • FSA - Flexible Spending Accounts
  • HSA - Health Savings Accounts
  • Retirement savings accounts like a traditional 401(k)
  • Some of the Fringe Benefits
  • health insurance
  • accident insurance
  • dental and vision insurance
  • Commuter Benefits
  • Short-Term Disability

Note: Pre-Tax deduction rate, contribution limits, special tax withholding rules change from year to year, according to inflation and costs of living by the federal government. Therefore, you must keep yourself updated with all rates before making any deductions.

Many Taxpayers find it hard to itemize their deductions to calculate taxable wages, for which they go for standard deductions, that varies according to the filing status, as shown in the table below:

All Filers(Updated Dec 2019)
Filing Status Standard Deduction Amount
Single Filers $12,200
Married, Filing Jointly $24,400
Married, Filing Separately $12,200
Head of Household $18,350

Step 3 – Calculate and Subtract Federal Taxes:

Once you have determined the taxable wages, it's time to deduct Federal Income taxes for the Taxable wages.

IRS requires the employers to withhold federal income tax from the employee's paycheck, according to the details provided by the employee on Form W-4. The employee fills this form at the start of the job. The form includes all the necessary information, including income, number of allowances to claim, number of dependents, amount of additional taxes to deduct, and much more.

The employees are required to keep their Form W-4 up to date with all their current information, especially marriage, divorce, or child's birth.

The federal income tax is charged according to the tax brackets in which the taxpayer's income falls. The latest income tax brackets and rates are as follow:

Single Filers
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Married, Filing Jointly
Taxable Income Rate
$0 - $19,400 10%
$19,400 - $78,950 12%
$78,950 - $168,400 22%
$168,400 - $321,450 24%
$321,450 - $408,200 32%
$408,200 - $612,350 35%
$612,350+ 37%

Married, Filing Separately
Taxable Income Rate
$0 - $9,700 10%
$9,700 - $39,475 12%
$39,475 - $84,200 22%
$84,200 - $160,725 24%
$160,725 - $204,100 32%
$204,100 - $306,175 35%
$306,175+ 37%

Head of Household
Taxable Income Rate
$0 - $13,850 10%
$13,850 - $52,850 12%
$52,850 - $84,200 22%
$84,200 - $160,700 24%
$160,700 - $204,100 32%
$204,100 - $510,300 35%
$510,300+ 37%

Step 4 – Deduct FICA Taxes:

Besides, Federal Income Tax, the IRS also requires the employer to withhold FICA tax (15.3%) for the employee's paycheck and also requires the employer to pay an equal amount for each employee.

Federal Insurance Contributions Act (FICA) Taxes comprises of two types of taxes which are as follow:


  1. Social Security:

A total of 12.4% of social security tax is charged from which 6.2% is withheld from the employee's gross, and the employer pays the matching 6.2%. However, Social Security is only charged on the maximum taxable earnings of $137,700 for 2020.


  1. Medicare:

A total of 2.9% of Medicare is charged, from which 1.45% is withheld from the employee's gross, and the employer pays the matching 1.45%. Unlike Social Security, there is no maximum table earning limit for this tax. However, an additional surtax of 0.9% is charged as Additional Medicare Surtax on the employees having income over the specified level along with filing status, which is as follow:

Income Over Filing Status
$250,000 Married Filing Jointly
$125,000 Married Filing Separately
$200,000 Single

Note: Employers are not required to pay an equal amount for Additional Medicare Surtax.

Step 5 – Payment of FUTA Taxes

IRS requires the employer to pay another tax, known as The Federal Unemployment Tax Act (FUTA) Tax. This tax is paid at the rate of 6% on the first $7000 earned by each employee in a year. However, the IRS doesn't require the employees to contribute to it.

The employers who pay State Unemployment Insurance (SUI) tax in full and on time are given relieving FUTA tax credit of up to 5.4%, which saves a whopping 90% from FUTA Tax.


Step 6 – Subtract Post-Tax Deductions (If any):

Post-tax deductions (after-tax deductions) is an amount the employer takes out from the employee's paycheck after taxes. Therefore, it does not affect taxable wages and the amount of tax payable.

Here are some of the types of post-tax deductions that employee may voluntarily choose:

  • Charitable contributions
  • Disability insurance
  • Garnishments
  • Specific Retirement Plans like Roth 401(k)
  • Life Insurance

Step 7 – Withhold State Payroll Taxes:

As you are done with Federal Payroll Taxes, now it's time to discuss State Payroll Taxes. The New Mexico State charge State Income Tax on the employees. Moreover, employers are required to pay State Unemployment Insurance Tax.


State Income Tax:

New Mexico follows the progressive income tax system, with a tax rate ranging between 1.70% and 4.90%, distributed in four tax brackets dependent on income level and filing status.

The employer withholds this tax from the employee's paycheck according to the details provided by the employee in the Form W-4. This form is filled by the employee while joining the job. Employees are required to keep the form updated with any significant life events like marriage, child's birth, and divorce.


Single Filers
New Mexico Taxable Income Rate
$0 - $5,500 1.70%
$5,500 - $11,000 3.20%
$11,000 - $16,000 4.70%
$16,000+ 4.90%

Married, Filing Jointly
New Mexico Taxable Income Rate
$0 - $8,000 1.70%
$8,000 - $16,000 3.20%
$16,000 - $24,000 4.70%
$24,000+ 4.90%
Married, Filing Separately
New Mexico Taxable Income Rate
$0 - $4,000 1.70%
$4,000 - $8,000 3.20%
$8,000 - $12,000 4.70%
$12,000+ 4.90%

Head of Household
New Mexico Taxable Income Rate
$0 - $8,000 1.70%
$8,000 - $16,000 3.20%
$16,000 - $24,000 4.70%
$24,000+ 4.90%

State Unemployment Insurance (SUI) Tax

The State Unemployment Insurance (SUI) Tax is an employer-funded program that provides temporary income to unemployed workers who have lost their job without fault of their own.

The state doesn't charge in New Mexico State Disability Insurance (SDI) Tax. However, it does require the employers to pay New Mexico State Unemployment Insurance (SUI) tax, at the rate ranging from 0.33% to 5.4% on a first $25,800 earned in wages by each employee in a year. However, new employers are given relief as they only have to pay the greater of 1.0%-1.31% of their industry's average rate.


Note: SUI Rates for New Mexico Employers changes with time. Therefore, you are required to keep a check on notices to make sure you have paid the right amount.

Step 8 – Withhold Local Payroll Taxes:

No city or county In New Mexico charges any Local Income Tax.


Step 9 – Calculate Pay Check:

Now that you are done with all payroll taxes and calculated the net take-home pay of an employee, it's time to cut the paycheck. Moreover, you, as an employer, must pay your portion of FICA tax along with FUTA and SUI tax in full and on time regularly.


Federal and New Mexico Payroll Laws:

  • New Mexico State requires the employer to maintain at least Semi-monthly pay frequency (not more than 16 days apart). Moreover, wages earned in the first 15 days of a month must be paid before the 25th day of a month, and wages earned in the last 15 days of the month must be paid before the 10th of the following month. However, bona fide administrative, professional, and executive employees, as well as outside salespersons, are allowed to be paid at monthly pay frequency.
  • Employers in New Mexico are required to pay at least the state minimum wage rate of $9.00 to their non-exempted employees. However, the following employees are exempted from the Minimum wage law of New Mexico:
    1. Agricultural Workers
    2. Tipped Employees; they can be paid a cash minimum wage rate of $2.35, with a maximum tip credit of $6.65.
  • Non - Exempted Employees working in New Mexico are required to receive overtime at one and half times of regular hourly rate, for each excess hour they work after 40 hours in a workweek. However, the following employees are exempted from Overtime in New Mexico are:
  1. Administrative employees
  2. Executive employees
  3. Professional employees
  4. Domestic or household workers
  5. Sales personnel compensated on a commission basis
  • The State doesn't require the employers to provide Meals and lunch breaks to their employees. However, if they voluntarily choose to do so, then break must be PAID if it is for less than 20 minutes, and UNPAID if it is more than 30 minutes of duration.
  • New Mexico State doesn't require employers to provide employees with either paid or unpaid vacation benefits.
Also Check: New Mexico Sales and Reverse Sales tax Calculator to Calculate the amount of tax included in a gross price as well as the amount you should add to a net price.

FAQs

Answer: Following are the taxes taken out of the employee's paycheck for working in New Mexico:

  • Federal Income Tax: This tax is taken out of paycheck at the rate ranging between 0% and 37%, distributed in seven tax brackets dependent on Income level and filing status.
  • FICA Tax –Social Security: This tax is charged at the rate of 6.2% on the first earnings of $137,700 for 2020.
  • FICA Tax – Medicare: This tax is charged at the rate of 1.45%, on the first earning of $200,000.
  • FICA Tax – Additional Medicare: If the earning exceeds $200,000, an additional Medicare surtax of 0.9% is also charged.
  • State Income Tax: This tax is withheld at the rate ranging between 1.7% and 4.9%, distributed in four tax brackets dependent on filing status and income level.

Answer: Yes, New Mexico has a state income tax that follows a progressive system. It is charged at the rates ranging from 1.7% to 4.9%, distributed in four tax brackets dependent on income level and filing status.

Answer: No, unlike some of the states, New Mexico doesn't require the employers to provide Meals and lunch breaks to their employees. However, if they voluntarily choose to do so, then break must be PAID if it is for less than 20 minutes, and UNPAID if it is more than 30 minutes of duration.

Answers: New Mexico follows the federal law for overtime, where employees are required to be paid at one and half of the regular hourly rate for each excess hour worked after 40 hours in a workweek.

Answer: The minimum wage rate is $9.0, for employees, unless or otherwise exempted. The Cash Minimum wage for Tipped Employees is $2.35, with a maximum tip credit of $6.65.

Answer: The cost of living index for the Mexico state is 88.9 points. This index is calculated considering the cost of housing, health, transportation, utilities, grocery, and miscellaneous expenses.

Other States Calcutors