New Mexico Payroll Compliance
Every rate, wage base, and local override New Mexico employers need for 2026 — sourced from Taxation & Revenue and the Dept. of Workforce Solutions — including a genuine four-jurisdiction wage patchwork and the rare case where a city's own ordinance pays less than the state floor.
Minimum Wage & Hours
New Mexico’s statewide minimum wage has held at $12.00/hour since 2023, with no automatic indexing. A 2025 bill (HB 246) that would have raised it to $17.00/hour was introduced but not passed — the state rate stays flat unless the legislature acts again.
| Item | 2026 Value | Notes |
|---|---|---|
| Statewide minimum wage | $12.00/hr | Unchanged since January 1, 2023; no automatic indexing |
| Tipped cash wage | $3.00/hr | Up to $9.00 tip credit; employee must earn >$30/month in tips |
| Youth wage | $10.50/hr | Under 18, first 90 days on the job only |
| HB 246 (2025) | Not passed | Would have raised the state rate to $17.00/hr and eliminated tip credits |
| Overtime rule | 40 hrs/week | Federal FLSA; New Mexico prohibits private-sector comp time in lieu of overtime pay |
Santa Fe, Las Cruces & Albuquerque Local Wage Rules
New Mexico runs a genuine four-jurisdiction wage system, and the rule for which rate applies is deceptively simple: always pay the highest of federal, state, county, and city. The twist is Albuquerque, where the city’s own calculated rate has fallen below the state floor — meaning employers there must ignore the local ordinance and pay the state rate instead.
| Jurisdiction | 2026 Rate | Notes |
|---|---|---|
| Santa Fe (city & unincorp. county) | $15.40/hr | Tipped $4.62/hr; CPI-indexed each March 1 |
| Las Cruces | $13.01/hr | Tipped $5.20/hr; CPI-indexed each January 1; applies regardless of employer size |
| Albuquerque (city ordinance rate) | $11.85/hr | Below the state floor — the $12.00 state rate governs instead |
| Albuquerque (prevailing rate) | $12.00/hr | State minimum wage supersedes the lower city-calculated rate |
| Albuquerque tipped | $7.20/hr | City tipped rate is well above the $3.00 state tipped floor |
| Rest of New Mexico | $12.00/hr | Statewide rate applies |
State Income Tax Withholding
New Mexico uses four graduated brackets from 1.5% to 5.9% — on the lower end nationally for states with a graduated tax. New Mexico has no state-specific withholding certificate; employees use the federal Form W-4 for state purposes too.
| Item | 2026 Value | Notes |
|---|---|---|
| Bracket range | 1.5% – 5.9% | 4 graduated brackets |
| Required certificate | Federal Form W-4 | New Mexico has no separate state withholding form |
| Local income tax | None | No New Mexico city or county imposes one |
| Reciprocity | None | New Mexico has no reciprocal withholding agreements with any state |
| Bernalillo County Wellness Act | Local PTO mandate | Requires paid time off for employers with 2+ employees in the county |
Unemployment Insurance (SUI)
New Mexico’s SUI wage base rose to $34,800 for 2026, up from $33,200. New employers generally start around 1% before moving into the full experience-rated range.
| Item | 2026 Value | Notes |
|---|---|---|
| SUI taxable wage base | $34,800 | Up from $33,200 in 2025 |
| Rate range | 0.33% – 6.4% | Based on claims history |
| New employer rate | ~1.0% | Rises from there based on industry and claims experience |
| Administering agency | NM DWS | Dept. of Workforce Solutions |
Official New Mexico .gov Resources
Verify every figure and register for accounts at the source. New Mexico employers with multi-city operations should verify each work location individually.