New Mexico paycheck taxes at a glance
| Income tax on wages | Progressive, 1.5% – 5.9% |
|---|---|
| NM workers’ comp fee | $9 a year |
| Minimum wage (2026) | $12.00 an hour (statewide rate; some cities set higher minimums, such as Las Cruces at $13.01) |
2026 New Mexico income tax brackets (single filers)
| Taxable income | Rate |
|---|---|
| $0 – $5,499 | 1.5% |
| $5,500 – $16,499 | 3.2% |
| $16,500 – $33,499 | 4.3% |
| $33,500 – $66,499 | 4.7% |
| $66,500 – $209,999 | 4.9% |
| $210,000 and up | 5.9% |
Example: a $70,300 salary in New Mexico
The median household income in New Mexico is about $70,342 (2025 data). Here's what one earner with that salary, paid every two weeks, filing single with no pre-tax deductions, would see on each paycheck in 2026:
| Gross pay | $2,703.85 |
|---|---|
| Federal income tax | −$255.23 |
| Social Security | −$167.64 |
| Medicare | −$39.21 |
| New Mexico income tax | −$82.25 |
| NM workers’ comp fee | −$0.35 |
| Take-home pay | $2,159.18 |
That's $56,139 a year in take-home pay, or 20.1% of gross pay going to taxes.
Take-home pay by salary in New Mexico
Single filer, paid biweekly, standard W-4, no pre-tax deductions:
| Salary | Per paycheck | Per year | State taxes | Total tax rate |
|---|---|---|---|---|
| $40,000 | $1,290.70 | $33,558 | $762 | 16.1% |
| $60,000 | $1,874.10 | $48,727 | $1,663 | 18.8% |
| $80,000 | $2,404.10 | $62,507 | $2,603 | 21.9% |
| $100,000 | $2,907.77 | $75,602 | $3,578 | 24.4% |
| $150,000 | $4,144.73 | $107,763 | $6,028 | 28.2% |
| $200,000 | $5,401.88 | $140,449 | $8,478 | 29.8% |
What changed for 2026
- The employee share of the workers' compensation fee rose from $2.00 to $2.25 a quarter on July 1, 2025, so 2026 is the first full year at $9.00. The employer share rose from $2.30 to $2.55 a quarter.
- Las Cruces raised its minimum wage to $13.01 an hour, and its tipped minimum to $5.20, on January 1, 2026. The statewide minimum stayed at $12.00.
New Mexico pay rules worth knowing
- Employers must pay at least twice a month. Executive, administrative and professional employees may be paid monthly.
The brackets New Mexico adopted in 2025
House Bill 252, passed in 2024, rebuilt New Mexico’s income tax brackets starting with the 2025 tax year. They’re unchanged for 2026. For single filers, the law:
- cut the bottom rate from 1.7% to 1.5%;
- added a new 4.3% bracket, from $16,500 to $33,500;
- pushed the start of the 4.9% bracket from $16,000 up to $66,500; and
- left the 5.9% top rate, above $210,000, where it was.
Most of the benefit goes to middle incomes. Compared with the old brackets, a single filer saves about $116 on $20,000 of taxable income and about $230 on $50,000. Above $66,500, the saving stays at $262.50 regardless of income, since the top two rates didn’t change. Married couples filing jointly and heads of household share one schedule, with the 4.9% rate starting at $100,000.
New Mexico also offers a low- and middle-income exemption of up to $2,500 per exemption. It phases out entirely at $36,667 of federal adjusted gross income for single filers and $55,000 for joint filers and heads of household, so it mainly helps lower-paid workers.
The workers’ compensation fee
Besides income tax, New Mexico takes a flat-dollar fee, not a percentage, from covered employees. The workers’ compensation fee funds the state’s Workers’ Compensation Administration and is split between employer and employee:
| Period | Employee share | Employer share |
|---|---|---|
| Before July 1, 2025 | $2.00 | $2.30 |
| July 1, 2025 – June 30, 2028 | $2.25 | $2.55 |
| July 1, 2028 – June 30, 2033 | $2.38 | $2.68 |
| From July 1, 2033 | $2.50 | $2.80 |
The amounts are per quarter, so the calculator includes the employee share as $9 a year for 2026.
Gross receipts tax: not on your pay stub
New Mexico’s main sales-type tax is the gross receipts tax. It’s imposed on businesses, on receipts from selling goods and from services, and businesses commonly pass it on to customers as a separate line on the bill. The combined rate depends on location, because counties and cities add their own rates to the state’s. Since July 1, 2025, local rates change only in July, except in special situations such as a natural disaster.
Minimum wages
The statewide minimum is $12.00 an hour, but local governments can set higher rates. Las Cruces, for example, is at $13.01 for 2026. To compare an hourly offer with a salaried one, try the salary calculator. The income tax calculator estimates your full-year federal tax.
Estimates only. Your employer’s payroll system and your W-4 determine your actual paycheck.
Sources
- U.S. Department of Labor: State minimum wage laws
- U.S. Department of Labor: State Payday Requirements
- City of Las Cruces: Minimum wage
- New Mexico Taxation and Revenue Department: Wage withholding tax and workers' compensation fee
- New Mexico Taxation and Revenue Department: Gross receipts overview
- Census Bureau: Household Income in States and Metropolitan Areas, 2025
- nmlegis.gov
- tax.newmexico.gov
- IRS Publication 15-T (federal withholding)
Frequently asked questions
What is the workers' compensation fee on my New Mexico pay stub?
It's a fee that funds the state's Workers' Compensation Administration, charged to covered employers and employees and reported each quarter. The employee share is $2.25 a quarter through June 2028, then rises to $2.38 and, from July 2033, $2.50. It isn't the same thing as the workers' compensation insurance premium your employer pays.
Do I qualify for New Mexico's low- and middle-income exemption?
You may if your federal adjusted gross income is no more than $36,667 as a single filer, or $55,000 if you're married filing jointly or a head of household. The exemption is worth up to $2,500 for each exemption you claim and shrinks as income approaches those limits.
Does gross receipts tax come out of my paycheck?
No. Gross receipts tax is imposed on businesses, though they commonly pass it on to customers as a separately stated charge on the invoice. The rate depends on where the sale happens, because it combines state, county and city rates.
How much did the 2025 bracket changes save?
For a single filer with $50,000 of taxable income, the current brackets produce $1,941 of tax, compared with $2,171 under the brackets in effect through 2024, about $230 less. For single filers the saving levels off at $262.50 once taxable income passes $66,500.
Are city minimum wages higher than the state's?
Some are. Las Cruces sets its own minimum wage, $13.01 an hour ($5.20 for tipped workers) for 2026. If you work in a city with its own minimum, check that city's current rate, since local rates can change on their own schedule.
Facts verified November 6, 2026. Estimates only; your employer's payroll system and your W-4 determine your actual withholding.