How To Calculate New York City Tax Using Payroll Software

New York City has implemented a personal earnings tax rate alter starting September 1, 2010. Technique II, Precise Calculation Technique, has changed. The New York City personal earnings tax rate alter affects wages of $500,000.00 and significantly more.


Employers using the wage bracket tables (Technique I) or dollar to dollar withholding tables will continue to use the New York City tables contained in Publication NYS-50-T. The exact calculation technique (Technique II) tables have changed and are included in NYS-50-T.2 replacing pages T-39, T-40 and T-40-A in NYS-50-T.


The New York State personal earnings tax rates, Yonkers resident personal earnings surcharge tax rate, and Yonkers nonresident earnings tax rate have not changed. Employers must continue to use the approaches in Publications NYS-50-T and NYS-50-T.1 to figure out the amounts to be withheld for these taxes.


Steps for computing the amount of tax to be withheld using Technique II Precise Calculation Technique and tax tables published in NYS-50-T.2. The following actions are a generic outline to guide you by means of the process of using the table with your payroll knowledge:


Step 1: Find the table in NYS-50-T.2 for the appropriate payroll period. Locate the line on which the net wages fall in between the amounts in Columns 1 and 2.

Step 2: Following across on the line you found in Step 2, subtract the amount in Column 3 from the net wages.

Step 3: Following across the exact same line, multiply the result from Step 3 by the amount in Column four.

Step four: Following across on the exact same line, add the result from Step four to the amount in Column five. The resulting sum is the amount to withhold from wages.
See page T-40-A for withholding calculation examples using Technique II.

New York City Technique II Precise Calculation Technique Instance

Instance: Weekly Payroll, $1000 gross wages, single, 1 exemption

1.Amount from Table A on page T-38 is $115.40 for single, weekly payroll, 1 exemption. $1000.00 wages - $115.40 = $884.60 net wages
2.Use Table II-A on page T-39 for single, weekly payroll. Look up $884.60 and use line five on which $884.60 is greater than Column 1 ($481.00) but less than Column 2 ($1154.00).
3.$884.60 - $481.00 (from Column 3, line five) = $403.60
four.$403.60 x .0390 (from Column four, line five) = $15.74.
$15.74 + $14.15 (from Column five, line five) = $29.89. Withhold this amount.

Locate detailed knowledge and New York City personal earnings tax rate tables via the internet at the New York State Department of Taxation and Finance web page or see Publication NYS-50-T, Publication NYS-50-T.1 or Publication NYS-50-T.2.


New York City employers could possibly find that tax rate modifications complicate the payroll process, uunnecessarily consume time and energy. A sensible New York City payroll answer would automatically update tax tables and automatically compute withholdings. It would be an crucial asset to any corporation as users can really feel peace of mind computations, payroll reports and tax forms (federal and state) are accurate.


New York City employers can save valuable time and resources by using NY payroll software program, Payroll Mate, to automatically calculate federal, New York State and New York City personal earnings taxes. With up to date tax tables this extensive
payroll program is an cheap answer to all small company owners payroll scenarios.