Payroll and Benefits Guide United States – New Mexico
Last updated: Apr 04, 2023
Employer Payroll Contributions
|0.33% – 6.40% (Max taxable wages is 30,100 USD)||Unemployment Insurance (State)|
|6.20% (Maximum taxable wages is 160,200.00 USD||FICA Social Security (Federal)|
|1.45%||FICA Medicare (Federal)|
|0.60% – 6.00% (Maximum taxable wages is 7,000 USD)||FUTA (Federal Unemployment Tax Act) The FUTA tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to0.6%.|
|8.58% to 20.05%||Total Employment Cost|
Employee Payroll Contributions
|8.55%||Total Employee Cost|
|6.20% (Maximum taxable wages is 160,200.00 USD)||FICA Social Security (Federal)|
|1.45%||FICA Medicare (Federal)|
|0.90%||Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.90% in Medicare taxes)|
Employee Income Tax
|State Tax – Single|
|1.70%||Up to 5,500 USD|
|3.20%||5,500 USD to 11,000 USD|
|4.70%||11,000 USD to 16,000 USD|
|4.90%||16,000 USD to 210,000 USD|
|5.90%||Over 210,000 USD|
|Married taxpayers filing jointly|
|1.70%||Up to 8,000 USD|
|3.20%||8,000 USD to 16,000 USD|
|4.70%||16,000 USD to 24,000 USD|
|4.90%||24,000 USD to 315,000 USD|
|5.90%||Over 315,000 USD|
|Standard Deduction and Personal Exemption|
|Couple /Married Filing Jointly||27,700 USD|
|Couple /Married Filing Jointly||N/A|
|Federal Employee Income Tax|
|Federal Tax – Singles|
|10.00%||Up to 11,000 USD|
|12.00%||11,001 USD to 44,725 USD|
|22.00%||44,726 USD to 95,375 USD|
|24.00%||95,376 USD to 182,100 USD|
|32.00%||182,101 USD to 231.250 USD|
|35.00%||231,251 USD to 578,125 USD|
|37.00%||578,126 USD or more|
|Federal Tax – Married, filing jointly|
|10.00%||Up to 22,000 USD|
|12.00%||22,001 USD to 89,450 USD|
|22.00%||89,451 USD to 190,750 USD|
|24.00%||190,751 USD to 364,200 USD|
|32.00%||364,201 USD to 462,500 USD|
|35.00%||462,501 USD to 693,750 USD|
|37.00%||693,751 USD or more|
|Federal Tax – Heads of Households|
|10.00%||Up to 15,700 USD|
|12.00%||15,701 USD to 59,850 USD|
|22.00%||59,851 USD to 95,350 USD|
|24.00%||95,351 USD to 182,100 USD|
|32.00%||182,101 USD to 231,250 USD|
|35.00%||231,251 USD to 578,100 USD|
|37.00%||578,101 USD or more|
|Standard Deduction and Personal Exemption|
|27,700.00 USD||Married Filing Jointly|
|20,800.00 USD||Head of Household|
The minimum wage in New Mexico is set at 12.00 USD an hour.
In general, employees in New Mexico are paid either semi-monthly or monthly, with payments on set dates as stipulated in the contract. For semi-monthly employees, payments must be made no later than the 25th of the month (for wages earned between the 1st to 15th of the month) and the 10th of the month (for wages earned between the 16th day of the month to the end of the month).
There is no legislation for 13th-month payments in New Mexico.
In New Mexico, the maximum standard working week consists of 40 hours, 8 hours per day.
New Mexico adheres to the Fair Labour Standards Act (FLSA) and overtime is paid where employees work more than 40 hours in a working week, the employer must pay 150% 0f the regular rate of salary for the extra hours worked as overtime.
Similarly, if employees are scheduled to work on weekends/rest days etc no additional payment is required, however, should an employer request an employee to work in exceptional circumstances on these days, then overtime will be payable at 150% 0f the regular rate of salary for the extra hours worked.
The Wage and Hour Division (WHD) of the Department of Labour (DOL) is responsible for the administration and enforcement of the FLSA.
Paid Time Off
New Mexico does not have any state statute governing the amount and payment of vacation time, however, it is common for employers to choose to offer a vacation leave, paid or unpaid, to their employees. This must comply with employment law and must be stipulated in any employment contract or collective bargaining agreement.
There are 11 official holidays, however private employers are not required to provide either time off or overtime pay on these days.
It is common for an employer to follow the Family and Medical Leave Act (FMLA), which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for specific family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). In New Mexico, the laws for state employees allow for 12 weeks of unpaid leave that runs simultaneously with the FMLA leave.
For non-state employees, there are no statutory laws on sick leave in New Mexico. However, an employer may be obligated to follow the Family and Medical Leave Act (FMLA) under the following conditions.
If they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.
FMLA eligible employees are entitled to:
- Twelve working weeks of leave in any one year for a child’s birth and to care for the new born child within one year of birth.
- The employee may be entitled to leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
- To care for the employee’s spouse, child, or parent who has a severe health condition.
- A serious health condition that makes the employee unable to perform the essential functions of their job.
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”
- Twenty-six working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).
In addition to the FMLA, the New Mexico Human Rights Act requires employers with four or more employees to protect employees against discrimination related to pregnancy, childbirth, or other related medical conditions.
Maternity leave falls under the FMLA as well as state laws.
PAID MATERNITY LEAVE (DAYS)
Paternity leave falls under the FMLA as well as state laws.
Parental leave falls under the FMLA as well as state laws.
New Mexico law requires all employers to provide their full-time employees two days of paid leave for jury duty or as a witness in a case, responding to a subpoena: or acting as a plaintiff or defendant in the courts. Employees must provide a copy of the jury summons to the employer as evidence of requirement.
In addition to the federal law USERRA, New Mexico law provides protection against discrimination for members of U.S. armed forces, reserves, National Guard, commissioned corps of the Public Health Service, and any other category of persons designated by the president in a time of war or emergency.
Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal “notice period” to terminate an individual employment relationship, and employment is stipulated “at will.”
This means that either the employer or the employee may terminate the employment relationship without giving either notice or reason, provided it is not illegal, or done on the grounds of discrimination against a group protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).
The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination case-by-case.
In New Mexico, most employees are employed “at-will,” and either party can terminate the employment relationship without notice. In New Mexico, pay out of unused vacation time is not required by law. Still, generally, employers will pay an employee for unused vacation days, provided the employee gave some advanced notice of resignation; there is no official notice period. In general practice, two weeks’ notice is a minimum requirement.
In mass dismissal cases, the employer must follow the Worker Adjustment and Retraining Notification Act (WARN Act), and any employees impacted give 60 days’ notice.
In mass dismissal cases the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.
Except as provided in an employment contract or collective bargaining agreement, employers do not need to make severance payments to terminated employees. Employers who offer severance payments need to have the provision stated within the employee’s contract, of which both parties must agree to.
Many employers choose to provide a severance payment linked to the employee’s length of service, the most common practice being one week’s pay for every year of service.
No legal provision governs a formal “trial /probation period.” However, it is common practice for employers to set a performance evaluation after an initial stated period of employment of 90 days
Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/ United States Citizenship and Immigration Services (“USCIS”) for an employment visa on behalf of the prospective employee.
If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request; the types of visas include:
- H-1B – for applicants with a college degree hired to do specialised work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialised knowledge.
- 0 – for people with extraordinary ability in science, arts, education, business, or athletics.
The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.
For those seeking employment-based immigrant visas:
- E-1 – Highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – Members of certain immigrant groups.
- E-5 – Immigrant investors in US companies (substantial investment)
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States. The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorised to work in the United States.
New Mexico has a minimum combined sales tax rate of 7.82% (State tax at 5.13% and Local tax average 2.69%%)
Stay up to date on payroll & employment law changes
New Mexico has a minimum combined 2022 sales tax rate of 7.208% (State tax at 5.125% and Local tax between 0.375 and 9.062%).
Payroll contributions and personal income tax rates have been updated.
Highest income tax rate raised to 5.9% for income over $210,000 for single people and $315,000 for married people filing jointly.
Questions & Answers
Payroll and Benefits Guide
in United States – New Mexico
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
Public Holidays Calendar
|Sunday||Jan-1||New Year's Day|
|Monday||Jan-16||Martin Luther King Jr. Day|
|Monday||Jun-19||Juneteenth Independence Day|
|Tuesday||Jul-4||Independence Day July|