Article
8 min read
New York Income Tax Guide for Employers (2025)
US payroll
Author
Shannon Ongaro
Last Update
November 28, 2025
Key takeaways
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The New York State Department of Taxation and Finance (NYSDTF) administers a progressive state income tax with nine income tax brackets ranging from 4.0 % to 10.9 %.
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Employers must withhold state income tax, register with the New York State Department of Labor (NYSDOL) for unemployment insurance, and file quarterly wage and withholding reports using Form NYS-45.
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You can simplify payroll and compliance in every state with Deel Payroll, built to make US payroll tax management fast, compliant, and effortless.
Accurate payroll management in New York requires understanding the state’s income tax rate structure, filing status options, and employer reporting duties.
New York income tax combines one of the highest state income tax rates nationwide with significant sales and property tax rates that affect overall state and local taxes. If your team includes remote or multi-state employees, it’s especially important to know which wages are taxable and how federal and state tax requirements work together.
How income tax works in New York
The NYSDTF administers New York’s personal income tax under Article 22 of the Tax Law.
Personal income tax
New York’s progressive income tax rate applies to residents, part-year residents, and non-residents with New York-source income. The 2025 income tax brackets span 4%–10.9%, determined by filing status and taxable income.
Interaction with federal income tax
Employers must withhold federal income tax, Social Security, and Medicare under federal law. New York requires separate withholding using Form IT-2104, which allows employees to declare allowances that align with their household income and adjusted gross income.
Other state and local taxes:
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Sales tax rate: 4% state base plus local add-ons (e.g., New York City’s combined rate is higher).
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Property tax rate: Set by local assessors; rates vary widely.
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Estate tax: Applies to estates exceeding the state threshold. (tax.ny.gov)
New York income tax rates and brackets
New York State's income tax rates vary based on income and filing status. Here are NY State’s income tax rates and brackets as of 2025:
Single filers
| Tax Rate | Taxable Income Over |
|---|---|
| 4.00 % | $0 |
| 4.50 % | $8,500 |
| 5.25 % | $11,700 |
| 5.50 % | $13,900 |
| 6.00 % | $80,650 |
| 6.85 % | $215,400 |
| 9.65 % | $1,077,550 |
| 10.30 % | $5,000,000 |
| 10.90 % | $25,000,000 |
Married filing jointly
| Tax Rate | Taxable Income Over |
|---|---|
| 4.00 % | $0 |
| 4.50 % | $17,150 |
| 5.25 % | $23,600 |
| 5.50 % | $27,900 |
| 6.00 % | $161,550 |
| 6.85 % | $323,200 |
| 9.65 % | $2,155,350 |
| 10.30 % | $5,000,000 |
| 10.90 % | $25,000,000 |
Local income taxes in New York State
New York City and Yonkers impose their own local income taxes on residents and certain non-residents.
| Jurisdiction | Rate |
|---|---|
| New York City resident income tax | For full‐year NYC residents, tax rates range from 3.078% up to 3.876% of NYC taxable income, depending on income level. |
| Yonkers resident income tax surcharge | City of Yonkers imposes a surcharge of 15% of the “net state tax” of the resident. |
| Yonkers non‐resident earnings tax | Nonresidents who earn wages or self‐employment income in Yonkers are subject to 0.50% on those earnings (the nonresident earnings tax). |
New York income tax deductions and credits
For 2025, the standard deduction amounts are:
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$8,000 for single filers
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$16,050 for married filing jointly
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$11,200 for head of household
Taxpayers can choose to itemize based on adjusted gross income and allowable expenses.
The NYSDTF administers several income tax credits, including:
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Real Property Tax Credit for eligible households
Employers don’t apply these credits during payroll, but should inform employees that credits may reduce final liability.
Deel Payroll - US
Residency rules and filing status
Residency determines whether an employee’s income is taxable by New York:
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Residents are taxed on all income, regardless of source.
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Part-year residents are taxed only for the portion earned while domiciled in New York.
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Non-residents pay tax only on New York-source income.
Employees must select the correct filing status—single, married filing jointly, married filing separately, head of household, or qualifying surviving spouse—which determines their income tax brackets and eligibility for tax credits.
Remote and hybrid work arrangements can shift withholding obligations. Employers should review where services are performed and adjust payroll promptly when employees relocate.
Filing and payment details
For individuals
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Forms: Residents file Form IT-201; non-residents or part-year residents file Form IT-203.
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Deadline: April 15, 2026 (for 2025 returns).
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Method: File electronically or by mail via NYSDTF Online Services; payments and refunds are processed through the same portal.
For employers
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Register with NYSDOL for unemployment insurance and with NYSDTF for withholding.
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File Form NYS-45 quarterly for combined wage, withholding, and UI reporting.
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Use Publication NYS-50-T-NYS for 2025 withholding rates.
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Report new hires within 20 days via the New York New Hire Reporting Program.
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Pay UI contributions based on the assigned rate and the 2025 wage base of $12,800.
Platform Tour
New York income tax compliance checklist
Staying compliant with New York’s complex income tax structure is key to accurate payroll processing and overall cost management. Use this payroll compliance checklist to ensure your business stays aligned with state and local tax requirements.
Payroll implications
- Verify that payroll systems apply New York’s state and local income tax rates accurately.
- Configure withholdings by employee filing status and taxable income.
- Confirm local taxes are included for employees based in New York City or Yonkers.
Multi-state and remote work considerations
- Determine whether each employee’s wages qualify as New York-source income.
- Ensure withholding and reporting compliance across federal, state, and local tax jurisdictions.
- Update employee work location records promptly when remote or cross-border changes occur.
Business and property obligations
- Review sales tax and property tax rates regularly—they directly affect employer costs.
- For businesses with high-value assets or estates, assess potential estate tax exposure under New York law.
Automating compliance
- Use modern payroll platforms like Deel Payroll - US to streamline compliance.
- Automate updates to tax brackets, UI rates, and filing requirements such as NYS-45.
- Simplify multi-state payroll management with integrated compliance tools.
Simplify US tax compliance with Deel
Deel Payroll - US takes the complexity out of multi-state payroll compliance. The platform automatically applies the latest state and local tax rates, including New York City and Yonkers surcharges, and adjusts for each employee’s filing status, taxable income, and household income.
For companies hiring across multiple states—or expanding their footprint in New York—Deel PEO provides even deeper support. Deel acts as the legal employer for HR, tax, and benefits administration, ensuring every element of state and local tax compliance is handled correctly and on time.
By centralizing payroll, compliance, and reporting in one system, Deel helps employers:
- Eliminate manual state-by-state filings and errors
- Stay compliant with evolving state and local tax laws
- Simplify year-end tax reporting and employee access to tax forms
- Focus on scaling teams, not managing spreadsheets
Simplify payroll and compliance in every state with Deel Payroll - US or Deel PEO, built to make US payroll tax management fast, compliant, and effortless. Book a free 30-minute platform demo to get your questions answered.
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Disclaimer: The information covered in this article is not tax or legal advice. Always consult with tax professionals to ensure compliance with the latest income tax laws.
Shannon Ongaro is a content marketing manager and trained journalist with over a decade of experience producing content that supports franchisees, small businesses, and global enterprises. Over the years, she’s covered topics such as payroll, HR tech, workplace culture, and more. At Deel, Shannon specializes in thought leadership and global payroll content.
