New Mexico Wage and Payroll Tax Facts

Miscellaneous New Mexico Tax Information

Reciprocal Agreement(s)

Reciprocal agreements are when workers who live and work in different states are only required to pay taxes to the state where they live. New Mexico currently has no reciprocal agreements with any other states.

This doesn’t mean, however, that interstate workers living in New Mexico pay double. It’s federally illegal for two states to tax the same income. In most cases, the employee’s work state will credit or refund them at tax time based on the taxes they owe their home state. If the tax rates differ, the employee must cover the difference.

Workers Compensation Assessment Fee

Businesses in New Mexico are required to pay a quarterly Worker's Compensation Assessment Fee for all salaried workers employed on the last working day of the quarter. The $4.30 fee is split between employee wages ($2.00) via payroll deductions and employer contributions ($2.30).

For example, if a business employed 100 workers last quarter, it would owe a $430 assessment fee. The employer would provide $230 ($2.30 x 100) of the fee, while the employees would split the remaining $200 by contributing $2.00 from each of their wages.

Paid Sick Leave (PSL) Taxes

The state of New Jersey doesn’t require employers to collect PSL taxes, but it does have a program providing such leave to employees:

New Mexico PSL Details
Covered Employees	All full-time, part-time, and temporary employees* who worked at least 80 hours within a 12-month period.
Covered Employers	All private employers
Accrual Method(s)	One hour for every 30 hours worked
Carryover Maximum	64 hours
Annual Accrual Maximum	64 hours
Probationary Period	None
Frontloading Allowed	Yes; prorated for those employed after January 1
FAQs	Healthy Workplaces Act FAQs

*Exempt employees are assumed to work 40 hours a week unless their normal workweek is less than that. In such cases, exempt employees accrue sick leave based on the hours worked during a normal workweek.

Paid Family and Medical Leave (PFML) Taxes

The state of New Mexico doesn't require employers to collect PFML taxes, nor does the state have a program providing such leave to employees.

Local Paid Leave Programs

San Bernalillo County also requires employers with two or more employees to provide those employees with paid time off (PTO) under its Employee Wellness Act (a.k.a., the Paid Time Off Ordinance).

San Bernalillo County PTO Details
Covered Employees	All who work at least 56 hours for an employer whose physical premises is within the unincorporated part of Bernalillo County.
Covered Employers	All with two or more employees
Accrual Method(s)	One hour per 32 hours worked
Annual Accrual Maximum	Varies based on the size of the employer: 2 - 10 employees = 28 hours 11 - 34 employees = 44 hours 35+ employees = 56 hours
Carryover Maximum	No more than the annual accrual maximum
Probationary Period	90 days
FAQs	Employee Wellness Act Guide