NY Payroll: Employer Tax and Software Guide

If another founder asked me where payroll is easiest to get wrong, New York would be near the top of my list. This guide covers what New York requires from employers as of October 2026, the deductions and thresholds that change each year, and how 10 payroll providers price the work, with costs modeled at 10, 25, and 50 employees.

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 surrounds it is not.

The paid family leave deduction changes every January, the disability deduction is capped at sixty cents a week, and the commuter tax runs on two zones with tiered rates. Two different minimum wages apply depending on which county someone works in, and pay frequency turns on what kind of work an employee does rather than what the employer prefers.

Most of these have no equivalent in Texas or Florida, which means a payroll setup that runs cleanly there 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.

Looking for NYS Payroll Online instead?

If you came here for NYS Payroll Online, this guide is not what you need, and the mix-up is easy to make because the terms overlap. 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.

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: state tax accounts, workers compensation coverage, disability benefits coverage, paid family leave, and new hire reporting. Unusually for a state, a single registration opens both the withholding and the unemployment insurance account.

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 Employer Identification Number (EIN) before filing it.

What is not covered by that registration is insurance. Workers compensation coverage is required from the first employee, and statutory disability benefits coverage follows once you have one or more employees on at least 30 days in a calendar year, under section 202 of the Workers Compensation Law.

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.

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.

Remitting withholding and filing NYS-45

New York withholding is remitted against a dollar threshold rather than a fixed calendar. Once the tax withheld reaches $700 within a calendar quarter, Form NYS-1 and payment are due within three or five business days of the payroll that crossed the line. Stay under $700 all quarter and nothing is due until the quarterly return.

Form NYS-45 is the combined withholding, wage reporting, and unemployment insurance return, due April 30, July 31, October 31, and January 31 with no extensions, per the Department of Taxation and Finance. The choice between the two deposit deadlines comes from a lookback to the calendar year before the previous one, so a new employer starts on the five-day schedule.

What is different for a New York City employer

NYC payroll is state payroll plus a local layer, and the city levies no separate employer payroll tax of its own. What it adds is a resident income tax withheld through the same state filing, the higher downstate wage floor, and Zone 1 of the Metropolitan Commuter Transportation Mobility Tax (MCTMT), the commuter tax that applies once quarterly payroll clears the threshold.

A city payroll therefore needs one capability most platforms handle badly: assigning the city tax by where an employee lives and the wage floor by where the hours are worked. Systems keyed to a single company address get one of those two wrong, and in a commuting workforce they get both wrong.

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.

Paid family leave rises on January 1, 2027. According to the New York State Department of Financial Services, the contribution rate becomes 0.452 percent of gross wages, up from 0.432 percent through December 31, 2026 (a 4.55 percent premium rate increase), and the annual cap becomes $451.81, up from $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. From January 1, 2027, employees receive 67 percent of their average weekly wage for up to 12 weeks, capped at $1,287.91 per week.

The weekly benefit cap is based on a New York State Average Weekly Wage of $1,922.25. The maximum an employee can receive in a year is $15,454.92 (through December 31, 2026 the weekly cap is $1,228.53 and the annual maximum $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

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. It is separate from both programs above and newer than either.

Four details catch employers. There is no minimum work requirement, so a newly hired employee is entitled from day one. The leave 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.

The 52-week period runs from first use rather than the calendar year, with no carryover of unused hours. Finally, 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 (MCTMT) 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 sits just below it while a company of 20 averaging $110,000 is well above it.

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, alongside a new 0.635 percent top tier in Zone 2.

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.

The second mechanic is timing. Liability is assessed quarter by quarter, so 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

New York sets two regional minimum wages and ties pay frequency to the type of job, and both rules differ from the states most payroll setups are built around.

Two minimum wages, sometimes in the same payroll

Both rates rose $0.50 on January 1, 2026, completing the schedule agreed through 2026. From 2027 the law indexes the rate each year to the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Northeast Region, with economic off-ramps but no fixed cap.

The first indexed year starts without an increase. According to the New York State Department of Labor, an off-ramp condition was met for 2027, so both rates stay at $17.00 and $16.00 on January 1, 2027.

Governor Hochul has proposed changing the off-ramp so workers still receive the inflation increase. That change would raise the rates to $17.60 and $16.55 on March 1, 2027 if the State Legislature approves it.

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 set by the state for executive and administrative employees, while professionals stay on the federal test. Because those state figures exceed the federal threshold, 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

A manual worker is broadly someone spending more than a quarter of working time on physical labor, which covers most construction, warehouse, food service, and maintenance staff. They must be paid weekly, and paying them biweekly is a violation of section 191 of the Labor Law even when the total amount is correct.

Large employers can apply to the Department of Labor for authorization 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.

OnPay

OnPay has one payroll plan at $49 per month plus $6 per employee, with HR tools and time tracking sold as optional add-ons rather than 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

Gusto is a 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 from $40 during 2025.

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

Patriot is the lowest-cost full-service option in this comparison. Full Service is $37 per month plus $5 per employee and includes federal, state, and local tax filing, though you still file new hire reports yourself. Local tax filing matters more in New York than in 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 matter here, because an employer with manual workers runs payroll weekly.

SurePayroll

SurePayroll is 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

QuickBooks Payroll was renamed in July 2026, when its entry tier became Workforce Payroll at $50 per month plus $7 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, 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: the Essential, Enhanced, Complete, and HR Pro packages are all quoted individually, and Enhanced is the first to add garnishment payment and state unemployment insurance services.

Paychex Flex

Paychex competes with ADP on the same terms: a service relationship rather than a software subscription, with a payroll specialist included on its top Complete package. Its home market is New York, which shows in familiarity with state-specific requirements. Every payroll package (Basic, Foundations, Advanced, and Complete) is priced on request.

Paylocity

Paylocity sits between small-business payroll and full human capital management software, aimed at companies that have outgrown basic payroll but do not want enterprise complexity. Its clients average more than 150 employees, according to its latest annual report, and the HR suite covers performance, learning, and engagement alongside payroll. Pricing is quote-based, and each client goes through a consultant-led implementation rather than a signup.

Rippling

Rippling sells a unified employee record where payroll, HR, and IT provisioning share one data model. Its pricing page lists no rates, but Rippling's small-business page starts payroll plans at $8 per user per month plus a $40 monthly base fee. Its blog prices the core platform at $8 per employee and payroll as a separate module at $8 per employee billed annually or $10 billed monthly, so a configured quote can run higher than that start.

Rippling's blog also estimates roughly $15 to $25 per employee per month for a 100-employee company running HR, payroll, benefits administration, and time tracking, which is a better guide than the starting rate to the bill once those products are added.

Justworks

Justworks sells two products under one name, and the company originated in New York. Payroll is $50 per month plus $8 per employee and is straightforward software.

PEO Basic, at $79 per employee per month, is the professional employer organization (PEO) product: a co-employment arrangement giving a small New York business access to benefits priced off a much larger risk pool, which is the usual reason to buy it. Multi-state payroll is included on every plan.

What each provider actually costs a New York employer

What you actually pay depends on headcount and on whether anyone on the payroll works in a second state. The table below models published rates at three headcounts and adds the second-state fee, which deserves particular attention in New York: the metro area spans New Jersey and Connecticut, so a single commuting hire crosses a line.

Two patterns stand out. Patriot stays cheapest at every headcount, and the gap widens with size: at 50 employees it runs about $60 a month below OnPay and Gusto Simple and about $90 below SurePayroll.

The second-state column reorders things, though. 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 more question is worth settling before you sign: do you want a national platform or a local payroll company? The ten above are national providers, and in the city they compete with neighborhood payroll bureaus and accounting firms that run payroll as a service for a monthly fee.

A bureau gives you a person who answers the phone and does the filings for you. A platform usually gives you published pricing and a system you operate yourself. Both file the same New York returns, so the question is who does the work rather than who covers the state.

Some paperwork 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 calendar days.

Before you choose

FirstHR is an onboarding and HR platform, not a payroll provider. Payroll runs, payroll tax filing, and benefits administration come from the providers above, so 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 that put the I-9 and W-4 on each new hire’s first-day task list, e-signatures on offer letters, employee records, and document management for US small businesses at a flat $98 a month for up to 10 people or $198 for 11 to 50. 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 coverage is required from the first employee, and disability benefits coverage once you have one or more employees on at least 30 days in a calendar year, with paid family leave added as a rider on the disability policy.

What is the New York paid family leave rate?

0.452 percent of gross wages per pay period from January 1, 2027, with an annual cap of $451.81 per employee (0.432 percent and $411.91 through December 31, 2026). The benefit is 67 percent of the employee's average weekly wage for up to 12 weeks. From January 1, 2027, it is capped at $1,287.91 per week, based on a state average weekly wage of $1,922.25 (through December 31, 2026 the cap is $1,228.53 and the state average $1,833.63).

What is the New York minimum wage?

$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 law indexes the rate to the regional Consumer Price Index for Urban Wage Earners and Clerical Workers, but an economic off-ramp was met for 2027, so both rates stay the same on January 1, 2027. Governor Hochul has proposed a change that would raise them to $17.60 and $16.55 on March 1, 2027, which needs approval by the State Legislature.

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, and the return is 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 0.452 percent of gross wages capped at $451.81 from January 1, 2027 (0.432 percent and $411.91 through December 31, 2026). Employers must carry disability coverage once they have one or more employees on at least 30 days in a calendar year.

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 October 2026 rates run roughly $87 for Patriot Full Service, $99 for SurePayroll, $109 for OnPay or Gusto Simple, $120 for QuickBooks Workforce Payroll, and $130 for Justworks Payroll. At 50 employees the same plans land between $287 and $450.

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 must be paid out unless a written policy the employee was told about provides for forfeiture, and unpaid wages expose an employer to liquidated damages of 100 percent plus attorney fees.