Payroll Tax Guide:
New York

New York is one of the more complex states for payroll taxes. Beyond a progressive state income tax with high rates, employers in New York City and Yonkers face additional local income taxes. The state also has mandatory disability and paid family leave programs. 

New York’s progressive state income tax features brackets with rates reaching up to 11.7% at the supplemental level. For 2026, each personal allowance is worth $1,000 and standard deductions are $7,400 for Single and $7,950 for Married. Employees complete Form IT-2104. New York City and Yonkers have their own additional withholding taxes. The state also has Disability Benefits Law (DBL) and Paid Family Leave (PFL) programs. 

New York supports the following supplemental calculation methods. When using the flat method, the supplemental rate is 11.7%. 

Your assigned SUTA rate will be based on your company’s experience with unemployment claims. New employers typically start at the default rate of 4.025%. 

State Disability Insurance (SDI): New York requires contributions to a disability insurance program. This provides short-term benefit payments to eligible workers who suffer a loss of wages due to non-work-related illness, injury, or pregnancy. Check with the state for current rates and wage base limits. 

Paid Family Leave Insurance: New York has a paid family leave program that provides wage replacement benefits for qualifying family and medical events. Both employers and employees may be required to contribute, depending on the program’s structure. 

Local Taxes: New York has city income taxes that may apply depending on the employee’s work and residence location. Be sure to verify which local jurisdictions apply to each employee.