NY Payroll: Employer Tax and Software Guide
New York payroll for employers: withholding, paid family leave at 0.432%, MCTMT zones, minimum wage by region, and 10 payroll providers compared on price.
New York Payroll: The Employer Guide
State withholding and registration, paid family leave and disability deductions, the commuter tax that catches growing employers, three minimum wage regions, and how 10 payroll providers price the work
New York asks more of a small employer than almost any other state, and it asks in ways that do not show up on a withholding table. The income tax withholding itself is ordinary. What is not ordinary is a paid family leave deduction that changes every January, a disability deduction capped at sixty cents a week, a commuter tax with two zones and tiered rates, two different minimum wages depending on which county someone works in, and a pay frequency rule that depends on what kind of work an employee does rather than what the employer prefers.
Most of these have no equivalent in other states, which means a payroll setup that runs cleanly in Texas or Florida will produce violations here. The pay frequency rule alone catches employers regularly: paying a manual worker biweekly is a violation in New York even when every dollar is correct.
This guide covers what New York requires from employers as of July 2026, the deductions and thresholds that change each year, and how 10 payroll providers price the work at 10, 25, and 50 employees.
Looking for NYS Payroll Online instead?
Worth clearing up first, because the terms overlap and the two audiences are completely different.
NYS Payroll Online is a self-service portal run by the Office of the State Comptroller for New York State government employees. It is where state agency staff view pay stubs, update withholding information, and opt out of paper statements. If you work for a state agency and want to see your own pay information, that portal is what you are looking for and this page will not help you.
This guide is for the other side: private employers who need to pay staff in New York, register for state tax accounts, handle the leave deductions, and choose payroll software. If that is you, everything below applies.
What New York requires from employers
Five obligations sit on top of federal payroll, and unusually for a state, the first registration covers two of them at once.
Registration and state accounts
New York consolidates what most states split. Form NYS-100, filed through New York Business Express, is a single Employer Registration for Unemployment Insurance, Withholding, and Wage Reporting, and it establishes accounts with both the Department of Taxation and Finance and the Department of Labor. You need a federal EIN before filing it.
What is not covered by that registration is insurance. Workers compensation coverage and statutory disability benefits coverage are both required from the first employee, and paid family leave is added as a rider on the disability policy rather than purchased separately. An employer who registers for tax accounts and stops there is not compliant.
| Requirement | Where it happens | Trigger |
|---|---|---|
| Withholding and unemployment accounts | Form NYS-100 via NY Business Express | Before the first payroll |
| Workers compensation coverage | Private carrier or the State Insurance Fund | First employee |
| Disability benefits coverage | Private carrier or the State Insurance Fund | First employee |
| Paid family leave | Rider on the disability policy | First employee |
| New hire reporting | NY New Hire Reporting Center | Within 20 days of hire |
State income tax withholding
New York withholds on progressive brackets, and the mechanics are conventional. What is not conventional is the local layer: New York City imposes its own resident income tax and Yonkers imposes both a resident tax and a nonresident earnings tax, all withheld through the same state system.
The employer reference is Publication NYS-50, the Employer's Guide to Unemployment Insurance, Wage Reporting, and Withholding Tax, published by the New York State Department of Taxation and Finance. Withholding tables are published separately and updated annually.
The two leave deductions and what they cost
New York runs two employee-funded insurance deductions that most states do not have at all, and both come off the same policy.
| Deduction | 2026 rate | Annual cap per employee | Who pays |
|---|---|---|---|
| Paid family leave | 0.432% of gross wages | $411.91 | Employee, employer may cover |
| Disability benefits | 0.5% of wages | $31.20 at $0.60 per week | Employee, employer funds the rest |
Paid family leave rose sharply for 2026. According to the New York State Workers Compensation Board, the contribution rate went from 0.388 percent to 0.432 percent, an 11.31 percent increase, with the annual cap moving from $354.53 to $411.91. Once an employee hits the cap during the year, deductions stop.
The benefit side matters for planning even though it does not affect payroll deductions. Employees receive 67 percent of their average weekly wage capped at $1,228.53 per week for up to 12 weeks, based on a New York State Average Weekly Wage of $1,833.63. The maximum an employee can receive in a year is $14,742.36.
Disability is smaller and easier to miss. The employee contribution is capped at $0.60 per week, or $31.20 annually, and the employer funds whatever the coverage costs above that. It is a trivial amount that nonetheless has to appear correctly on every pay stub.
Paid prenatal leave
Separate from both of the above and newer than either. Since January 1, 2025, every private sector employer in New York, regardless of size, must provide 20 hours of paid prenatal leave per 52-week period for pregnancy-related health care.
Three details catch employers. There is no minimum work requirement, so a newly hired employee is entitled from day one. It is additional to New York State paid sick leave rather than part of it, and an employer cannot require an employee to use sick leave instead. And the 52-week period runs from first use rather than the calendar year, with no carryover of unused hours. Only the pregnant employee may use it, not a spouse or support person.
The commuter tax that catches growing employers
The Metropolitan Commuter Transportation Mobility Tax is a quarterly payroll tax on employers with staff in the twelve-county district around New York City. Most small employers never pay it, and the ones that do usually discover it after crossing the threshold rather than before.
The exemption is the number to know: if combined payroll expense across both zones is $312,500 or less in a calendar quarter, you owe nothing and file nothing. That works out to roughly $1.25 million in annual payroll, so a company of 15 people averaging $80,000 is comfortably below it while a company of 20 averaging $110,000 is not.
| Zone | Counties | Quarterly Zone payroll | Rate |
|---|---|---|---|
| Zone 1 | Manhattan, Bronx, Brooklyn, Queens, Staten Island | Up to $375,000 | 0.055% |
| Zone 1 | Same | $375,000 to $437,500 | 0.115% |
| Zone 1 | Same | $437,500 to $2,500,000 | 0.60% |
| Zone 1 | Same | Over $2,500,000 | 0.895% |
| Zone 2 | Rockland, Nassau, Suffolk, Orange, Putnam, Dutchess, Westchester | Tiered by payroll level | Lower than Zone 1 |
Rates shown are those effective for quarters beginning on or after July 1, 2025, per the New York State Department of Taxation and Finance. The 0.895 percent top tier for large Zone 1 employers was added in that change and applies to quarterly Zone 1 payroll above $2.5 million.
Two mechanics matter. The $312,500 threshold is assessed on combined payroll across both zones, but once you exceed it, each zone is calculated separately at its own rate based on payroll allocated to that zone by the employee's primary work location. And liability is assessed quarter by quarter: a company that exceeds the threshold in Q2 and falls below it in Q3 files for Q2 and not Q3.
Minimum wage regions and pay frequency
Two more places where New York differs from the states most payroll setups are built around.
Two minimum wages, sometimes in the same payroll
| Region | Minimum wage | Tipped food service cash wage | Exempt salary threshold |
|---|---|---|---|
| NYC, Long Island, Westchester | $17.00 | $11.35 plus $5.65 tip credit | $1,275.00 per week |
| Rest of New York State | $16.00 | $10.70 plus $5.30 tip credit | $1,199.10 per week |
Both rates rose $0.50 on January 1, 2026, completing the schedule agreed through 2026. From 2027 the minimum wage indexes annually to the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Northeast Region, with a cap and an economic off-ramp.
The rate follows where the work is physically performed rather than where the employer is located. A Westchester-based company with a crew working a job in Albany pays the upstate rate for those hours, and a company headquartered upstate with staff in Manhattan pays the downstate rate for them. Payroll systems keyed to a single company address will get this wrong.
The exempt salary thresholds in the fourth column are New York's own and exceed the federal threshold, which means an employee can be exempt federally and non-exempt in New York. That is an overtime exposure rather than a minimum wage one.
Pay frequency depends on the job, not the employer
| Worker classification | Required frequency | Deadline |
|---|---|---|
| Manual worker | Weekly | Within 7 calendar days of the week worked |
| Clerical and other | At least twice per month | On regular designated paydays |
| Commissioned salesperson | At least once per month | By the last day of the following month |
| Railroad worker | Weekly | Set by statute |
A manual worker is broadly someone spending more than a quarter of working time on physical labour, which covers most construction, warehouse, food service, and maintenance staff. They must be paid weekly, and paying them biweekly is a violation of the Labor Law even when the total amount is correct.
Large employers can apply to the Department of Labor for authorisation to pay manual workers semi-monthly, but that is an application rather than an election. For a small business the practical rule is that if you employ manual workers, your payroll runs weekly, and that changes the arithmetic on any provider charging per payroll run rather than per month.
10 payroll providers for New York employers compared
Every provider below files New York withholding and unemployment insurance. The differences that matter here are whether the platform handles the paid family leave and disability deductions correctly, whether it tracks MCTMT, and how it applies two regional minimum wages.
| Provider | Best For | Starting Price | Pricing Model | NY Tax Filing | Multi-State Included | Benefits Admin | Trial |
|---|---|---|---|---|---|---|---|
| OnPay | All-in pricing, no tiers | $49 + $6/ee | Base + PEPM | 1 month | |||
| Gusto | First-time payroll buyers | $49 + $6/ee | Base + PEPM | Until 1st run | |||
| Patriot | Lowest cost, tight budgets | $37 + $5/ee | Base + PEPM | 30 days | |||
| SurePayroll | Very small and household teams | $29 + $7/ee | Base + PEPM | Varies | |||
| QuickBooks | Existing QuickBooks accounting | $50 + $6.50/ee | Base + PEPM | 30 days | |||
| ADP RUN | Compliance depth at scale | ~$79 + $4/ee | Quote | 3 months | |||
| Paychex Flex | Hands-on service model | ~$39 + $5/ee | Quote | Varies | |||
| Paylocity | Growing teams wanting HR depth | Quote | Quote | Demo | |||
| Rippling | Payroll tied to HR and IT | $35 + $8/ee | Modular PEPM | Demo | |||
| Justworks | Benefits through a PEO | $50 + $8/ee | Base + PEPM | Demo |
OnPay
One plan at $49 per month plus $6 per employee, with every feature included and no tiers. Tax filing covers all 50 states with no multi-state surcharge, and year-end W-2 and 1099 filing sits in the base price. For a New York employer with staff commuting from New Jersey or Connecticut, that structure removes the most common billing surprise.
Gusto
The most common first payroll purchase for US small businesses. Tax filing is automatic, the interface is pleasant, and pricing is published. Simple runs $49 per month plus $6 per employee after a base increase in March 2026.
The catch for New York employers is acute because of geography. Simple covers single-state payroll only, and the New York metro area spans three states. One hire in New Jersey or Connecticut moves you to Plus at $80 plus $12 per employee, which roughly doubles the bill for a 25-person team.
Patriot Software
The cheapest legitimate full-service payroll available. Full Service is $37 per month plus $5 per employee and includes federal, state, and local tax filing plus new hire reporting. Local tax filing matters more in New York than most states given the NYC and Yonkers layers.
Additional states cost $12 per month each, which erodes the advantage for a tri-state employer. Unlimited payroll runs with no per-run fee is worth noting specifically here, because employers with manual workers are running weekly.
SurePayroll
Owned by Paychex and aimed at very small employers and household employers. Full Service is $29 per month plus $7 per employee, with a flat $9.99 monthly multi-state fee regardless of how many states are involved. For a New York business with a few people across the Connecticut or New Jersey line, that flat structure beats per-state pricing.
QuickBooks Workforce Payroll
Formerly QuickBooks Payroll, renamed in July 2026. Core is $50 per month plus $6.50 per employee. The reason to pick it is unchanged: if your books already live in QuickBooks Online, payroll entries reach the general ledger without an export step.
ADP RUN
ADP processes payroll for roughly one in six American workers and has the deepest tax compliance engine in the category. For a New York employer the practical argument is the local layer: NYC resident tax, Yonkers, MCTMT zone allocation, and annual paid family leave rate changes reach ADP tables without anyone at your company tracking Albany.
The cost is opacity. ADP does not publish RUN pricing; third-party estimates put Essential near $79 per month plus $4 per employee. Contracts typically run a year with automatic renewal and a 30 to 60 day cancellation window.
Paychex Flex
Paychex competes with ADP on the same terms: a service relationship rather than a software subscription, with a named contact at higher tiers. Its home market is New York, which shows in familiarity with state-specific requirements. Pricing is quote-based above the entry tier, and quarterly administrative charges appear regularly in customer reports.
Paylocity
Paylocity sits between small-business payroll and full HCM, aimed at companies that have outgrown basic payroll but do not want enterprise complexity. It publishes detailed per-state tax facts including New York, and the HR module covers performance, learning, and engagement alongside payroll. Pricing is quote-based and implementation is a project rather than a signup.
Rippling
Rippling sells a unified employee record where payroll, HR, and IT provisioning share one data model. The core platform is $35 per month plus $8 per employee, with payroll as a separate module. Real-world all-in costs land between $25 and $45 per employee per month once you assemble a working configuration.
Justworks
Two products under one name. Payroll is $50 per month plus $8 per employee and is straightforward software. PEO Basic at $79 per employee per month is a co-employment arrangement giving a small New York business access to benefits priced off a much larger risk pool, which is the actual reason most companies buy it. Justworks originated in New York and its documentation on state-specific items including MCTMT is unusually detailed.
What each provider actually costs a New York employer
The table below models published rates at three headcounts, plus what happens when a second state enters the picture. That column deserves particular attention in New York, because the metro area spans New Jersey and Connecticut and a single commuting hire crosses a line.
| Provider | 10 employees | 25 employees | 50 employees | 2nd State Fee | Notes |
|---|---|---|---|---|---|
| Patriot | $87 | $162 | $287 | $12/mo | Per extra state |
| SurePayroll | $99 | $204 | $379 | $9.99/mo | Flat, all states |
| OnPay | $109 | $199 | $349 | $0 | None |
| Gusto Simple | $109 | $199 | $349 | Upgrade | Plus tier required |
| QuickBooks | $115 | $212 | $375 | Included | None |
| ADP RUN | ~$119 | ~$179 | ~$279 | Quote | Varies by contract |
| Justworks | $130 | $250 | $450 | Included | None |
Two patterns stand out. Patriot stays cheapest at every headcount, and at 50 employees it costs less than several competitors do at 25. But the second-state column reorders things: Gusto Simple is competitive until one New Jersey hire forces the Plus tier, at which point a 25-person payroll goes from $199 to $380 per month.
Software price is also not the whole New York number. Disability and paid family leave insurance premiums, workers compensation coverage, and MCTMT above the threshold are statutory costs no provider changes, and they belong in the budget alongside the subscription line.
Choosing a payroll provider for New York
Four questions separate providers that will work here from providers that will quietly generate correction notices.
One item sits outside the payroll engine entirely. Every New York new hire needs a federal I-9 and W-4, a state Form IT-2104 for withholding allowances, and a new hire report filed within 20 days. Our guide to tax forms for new employees covers the federal side, and the New York HR compliance guide covers the surrounding employment law.
Before you choose
FirstHR does not process payroll, file payroll taxes, or administer benefits. Every provider above does something we do not, and if running payroll is the problem in front of you, one of them is the answer.
What we handle is the layer that feeds payroll: onboarding workflows, e-signatures on I-9s and offer letters, employee records, and document management for 5 to 50 employee US teams at a flat $98 to $198 per month. New York gives that layer more to do than most states, between IT-2104 forms, paid prenatal leave entitlements that begin on day one, and wage notice requirements at hire. If the recurring problem is that paperwork arrives late and nobody is certain what a given employee signed, that is a document collection failure rather than a payroll processing failure, and it is the kind of gap we built for.
Frequently Asked Questions
How do I register a business for New York payroll taxes?
File Form NYS-100 through New York Business Express, which establishes both withholding and unemployment insurance accounts in one application. You need a federal EIN first. Separately, workers compensation and disability benefits coverage are required from the first employee, with paid family leave added as a rider on the disability policy.
What is the New York paid family leave rate for 2026?
0.432 percent of gross wages per pay period, up from 0.388 percent in 2025, with an annual cap of $411.91 per employee. The benefit is 67 percent of average weekly wage capped at $1,228.53 per week for up to 12 weeks, based on a state average weekly wage of $1,833.63.
What is the New York minimum wage in 2026?
$17.00 per hour in New York City, Long Island, and Westchester County, and $16.00 in the rest of the state, both effective January 1, 2026. The rate follows where the employee physically works. From 2027 the minimum wage indexes annually to the regional Consumer Price Index for Urban Wage Earners and Clerical Workers.
What is the MCTMT and does my business have to pay it?
A quarterly payroll tax on employers with staff in the twelve-county district around New York City. You are exempt if combined quarterly payroll across both zones is $312,500 or less, which excludes most small employers. Above that, Zone 1 covering the five boroughs and Zone 2 covering the surrounding counties are assessed separately at tiered rates, filed on Form MTA-305.
What are the New York disability and paid family leave deductions?
Two separate deductions from the same policy. Disability allows an employee contribution of one half of one percent capped at $0.60 per week, or $31.20 annually. Paid family leave is 0.432 percent of gross wages capped at $411.91 for 2026. Employers must carry disability coverage from the first employee.
How often do New York employers have to pay employees?
Manual workers weekly, within seven days of the week worked. Clerical and other workers at least twice per month. Commissioned salespeople at least monthly. Frequency is set by job classification rather than employer preference, and paying a manual worker biweekly is a violation regardless of whether the amount is correct.
What is paid prenatal leave in New York?
Twenty hours of paid leave per 52-week period for pregnancy-related health care, required of every private sector employer since January 1, 2025 regardless of size. There is no minimum service requirement, it is additional to paid sick leave, and the period runs from first use rather than the calendar year with no carryover.
How much does payroll software cost for a New York small business?
At 10 employees, published July 2026 rates run roughly $87 for Patriot Full Service, $99 for SurePayroll, $109 for OnPay or Gusto Simple, $115 for QuickBooks Core, and $130 for Justworks Payroll. At 50 employees the same plans land between $287 and $450. See the payroll pricing guide for how these models compare in general.
Is NYS Payroll Online the same as running payroll in New York?
No. NYS Payroll Online is a self-service portal operated by the Office of the State Comptroller for New York State government employees to view their own pay stubs and update withholding information. It is not a payroll system for private businesses. A private employer paying staff in New York needs commercial payroll software or a payroll service.
When is the final paycheck due in New York?
By the regular payday for the pay period in which the separation occurred, whether the employee resigned or was terminated. New York does not require same-day payment on termination. Accrued vacation is payable only where written policy provides for it, and unpaid wages expose an employer to liquidated damages of 100 percent plus attorney fees.