State Payroll: New York

Last Updated: May 25, 2016 11:00AM EDT
Are you an employer operating in the state of New York? If so, you've come to the right place to brush up on your tax responsibilities. While we've already written about federal tax obligations, we've consolidated everything you need to know about New York state down to this short guide. Read on to learn about your payroll responsibilities in the state of New York:  

NEW YORK STATE INCOME TAX


Each calendar quarter, you’re required to report NY withholding taxes that have been withheld from employee wages. If you are an employer in the state of New York, you must register with the New York State Department of Taxation and Finance in order to submit tax withholding forms.

 
  • To register, go to the New York State Department of Taxation and Finance Tax Preparer Registration webpage and click on “Register as a tax preparer.”
  • Once you register, you will receive a 5-digit registration identification number called NYTPRIN, and a printed certificate confirming your successful registration. 
  • After registering, you will need to create another account with the New York State of Taxation and Finance Online Services for Businesses in order to file withholding forms with the state electronically online. Keep your NYTPRIN number close at hand, as you must provide it in order to create an account.
To report withholding taxes in New York, you must file the FORM NY-45-I Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return). You can file this form electronically online or file the paper version of the form.

Annual Wage and Withholding Statements, also known as W-2s, are filed with the New York State Department of Taxation and Finance. Duplicate W-2s are available for print at the NYCAPS Employee Self-Serve website.


NEW YORK STATE UNEMPLOYMENT OBLIGATIONS

Each calendar quarter, you're also required to report Unemployment Insurance contributions. These employer-funded taxes fund State Unemployment Benefits, which 
provides temporary unemployment benefits to workers that have become unemployed involuntarily. 

  New York state requires unemployment records to be retained for a minimum period of 3 years. The following table displays the information required:
Name
Social Security Number
Dates of hire, separation, rehire and termination
Wages by period
Payroll pay periods and pay dates
Date and circumstances of termination 
Time lost during a payroll period because the employee was unavailable to work 


METROPOLITAN COMMUTER TRANSPORTATION MOBILITY TAX (MCTMT)

If you are required to withhold New York State income tax from wages and your payroll expense exceeds $312,500 in any calendar quarter beginning on or after April 1, 2012 you are required to pay the 
Metropolitan Commuter Transportation Mobility Tax. For calendar quarters beginning on or after April 1, 2012, your MCTMT due is your payroll expense (for all covered employees for each calendar quarter) multiplied by applicable MCTMT rate from the table below. 

Payroll Expense MCTMT RATE
Over $312,500 but not over $375,000 .11% (.0011)
Over $375,000 but not over $437,500 .23% (.0023)
Over $437,500 .34% (.0034)

When to file and pay for each calendar quarter is listed as follows:

Quarter Due Date
January 1 to March 31 April 30
April 1 to June 30  July 31
July 1 to September 30 October 31
October 1 to December 31 January 31

When the due date falls on a Saturday, Sunday, or legal holiday, you may file on the next business day.

No extensions of time to file or pay the tax are allowed.

How to file and pay

  • File and pay online: Web File Form MTA-305, Employer's Quarterly Metropolitan Commuter Transportation Mobility Tax Return and pay directly from your bank account. (To Web File you must create an Online Services business account.)
  • File paper Form MTA-305, Employer's Quarterly Metropolitan Commuter Transportation Mobility Tax Return (MCTMT forms), and pay by check or money order.
    • Make your check or money order payable in U.S. funds to Commissioner of Taxation and Finance for the total payment due. Write your EIN and MTA-305 on your payment.
    • Do not combine your MCTMT payment with your withholding tax payment. You must submit a separate MCTMT payment.
  • You can choose to pay this tax using the PrompTax program if you currently use the PrompTax program to file New York State withholding tax. See employers participating in the PrompTax programfor details.
  • You do not have to attach a listing of covered employees when filing and paying the tax.

See more information here.

NYC'S COMMUTER BENEFITS LAW


Under the NYC Commuter Benefits Law, effective January 1, 2016, for-profit and nonprofit employers with 20 or more full-time non-union employees in New York City must provide full-time employees the opportunity to use pre-tax income income to purchase qualified transportation fringe benefits. This pre-tax commuter program, enforced by the Department of Consumer Affairs (DCA), is based on the Internal Revenue Code that authorizes pre-tax commuter programs allows  employees to draw from their pre-tax dollars to purchase transit benefits, reducing their monthly transit expenses. In turn, employers benefit by reducing their payroll taxes. 

Employers must offer full-time employees the opportunity to use pre-tax income to purchase qualified transporation fringe benefits, other than qualfied parking, by January 1, 2016 or four weeks after an employee begins full-time work, whichever is later. 

Employers have a six-month grace period - from January 1, 2016 until July 1, 2016 - before the DCA Is authorized to seek penalties. After July 1, 2016 employers have 90 days to cure (correct) any violation of the Commuter Benefits Law before any penalty may be imposed. 

Read about the NYC Commuter Benefits Law


NEW YORK STATE WAGE REPORTING 

Under the state of New York, wage reporting must be submitted via electronic upload through the New York State Department of Taxation and Finance Tax Preparer Registration webpage. To file quarterly wage reports, follow the instructions included in Publication 69: “
Electronic Reporting of Quarterly Combined Wage and Withholding Tax Information."  Use form NYS-45: Quarterly Combined Withholding, Wage Reporting and Unemployment Insurance Return to file quarterly wage reports online. You can begin the filing process through online services here.  


New York also requires employee pay stubs to contain the following information: 

Gross and net earnings
Deductions
Explanation of wage computation if requested 
Dates of work
Name of employee and employer
Pay rate(s) and their basis
Allowances claimed as part of minimum wage
Regular hourly rate of pay (nonexempt employees) 
Number of regular and overtime hours worked (nonexempt employees) 
Applicable piece rate and number of pieces completed (nonexempt employees)
 

NEW YORK OVERTIME REQUIREMENTS

New York law requirements are no different than the federal overtime requirements. Employees are entitled to overtime pay (1 ½ regular rate) for hours worked over the weekly maximum of 40 hours a week.

NEW YORK NEW HIRE REQUIREMENTS 

New York employers are required to report newly hired employees to a designated state agency within 20 calendar days from the hiring date. FingerCheck360 offers electronic new hire reporting to clients, free. To begin using this service, please contact your support representative or contact us by email at info@fingercheck.com or by phone at 1-800-610-9501.

New York employers are required to report the following information for each new hire:

Employee's Name
Employee's Address
Employee's Social Security Number 
Date Employee first performed services for pay
Employer's Name
Employer's Address
Federal Employer Identification (EIN)
Dependent Health Insurance Information
Date Employee qualifies for benefits 


Penalties:

  • For failing to report new hires within the instructed window of time: $20 x number of employees not reported
  • For failing to file a report showing the required information: $20 x number of false or incomplete reports filed 

Employers can submit the new hire information online at www.nynewhire.com or by submitting a copy of the employee's Form IT-2014, Employee's Withholding Allowance Certificate, in place of, or in addition to, the federal Form W-4, Employees Withholding Allowance Certificate. 

NEW YORK PAY FREQUENCY REQUIREMENTS

Generally, New York requires that employees be paid no less then on a semimonthly basis. Manual workers are required to be paid weekly (semimonthly if commissioner of labor agrees). Less frequency is allowed for FLSA-exemption employees paid $600 a week. 

NEW YORK DISABILITY AND FAMILY LEAVE 


New York employers are required to provide for the payment of State Disability Benefits to all eligible employees, which includes full-time and part-time employees. The contributions fund the State Disability Insurance (SDI) benefits program, which provides weekly cash wages to employees who are unable to work due to injuries or illnesses that do not arise out of or in the course of employment. The benefits are 50 percent of a claimant's average weekly wage, up to the maximum allowed which is currently $170 per week.

In order to comply with the law, the employer must purchase a policy of insurance from any insurance company authorized to write Disability Benefits insurance in this state, including the State Insurance Fund. They can apply to the Chair for approval as a self-insurer with permission to deposit securities or file a surety bond. Employers are allowed to collect contributions from employees to help offset the cost of providing benefits. An employee's contributions are .5% of the employee's weekly wages up to a maximum of $.60. 


NEW YORK UNCLAIMED WAGES

Escheat laws in New York require employers to pay unclaimed wages over to the state after three years. After three years, 
organizations are required to report dormant accounts and lost/unclaimed funds to the New York State Office of the State Comptroller, which provides a free service that allows New Yorkers to reclaim their lost funds. This money includes things like forgotten savings accounts, lost paychecks, and stocks or bonds.   


NEW YORK TIP CREDIT

In dining or other establishments where employees receive cash tips in addition to their wages, the employer can pay a subminimum wage.  In New York, payroll law mandates that tips received by the employee can be applied up to but not to exceed:

  • $2.25 for food service workers
  • $1.60 for service employees
  • $2.35 for service employees in resort hotels


NEW YORK MEAL & REST PERIOD REQUIREMENTS


The following meal and rest periods are required to be given under New York law:

  • 30 minutes for noon meal between 11am to 2pm
  • 60 minutes for noon meal between 11am to 2pm for factory workers
  • Another  20 minute break between 5pm and 7pm if the shift starts before 11am and continues past 7pm
  • A 45 minute break is required during a shift of at least 6 hours starting between 1pm and 6am
  • A 60 minute break is required during a shift of at least 6 hours starting between 1pm and 6am for factory workers
NEW YORK WAGE & HOUR RETENTION


New York Labor Law requires employers to preserve payroll records for a minimum period of six years.  These payroll records must include

Hours worked each week
The rate or rates of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece, commission, or other basis
Gross wages
Deductions
Allowances, if any, claimed as part of the minimum wage, and net wages 


NEW YORK MINIMUM WAGE RATE

The minimum wage in New York is $9.00 per hour as of December 31, 2015. The Federal Minimum Wage is $7.25 currently.

NEW YORK PAID SICK LEAVE LAW  


Employers with five or more employees who are hired to work more than 80 hours a calendar year are required to provide employees with a paid sick leave policy that accrues at the rate of 1 hour for every 30 hours worked, up to 40 hours per calendar year under the New York City Paid Sick Leave Law.

NEW YORK CHILD SUPPORT REQUIREMENTS


New York has the following provisions for child support deductions:

  • When to start Withholding? First pay period after 14 days from service.

  • When to send Payment? Within 7 days of Payday.

  • When to send Termination Notice? "Promptly".

  • Maximum Administrative Fees? No Provision.

  • Withholding Limits? 50% of disposable earnings. 60% if employee is not supporting another spouse or child.

NEW YORK WORKERS COMPENSATION INFORMATION


New York is considered a "Non-National" Council state. Non-National Council states do not follow the uniform classification codes as called out by the National Council on Compensation Insurance, but instead use an independent worker’s compensation manual.

NYS Worker’s Compensation Board 328 State Street Schenectady, NY 12305-2318

Mailing Address: NYS Worker’s Compensation Board Centralized Mailing Address P.O. Box 5205 Binghamton, NY 13902-5205 (877) 632-4996 (518) 462-8880 Fax (877) 533-0337 General_information@wcb.ny.gov
 

While we have summarized this information for easy reading, we know perfectly well that payroll taxes and the laws that govern them can be perplexing. That's why we handle all our clients' tax reporting obligations and file their local, state, and federal payroll taxes so they never have to worry. Interested? You can learn more and sign up at FingerCheck360.
 

 

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