★ New Mexico 2026 Compliance Year

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.

Last reviewed: July 2026 · Sources: tax.newmexico.gov, dws.state.nm.us
State Min Wage
$12.00
Santa Fe Co. $15.40
Income Tax
1.5%–5.9%
4 brackets
SUI Wage Base
$34,800
up from $33,200
Workers' Comp Fee
$4.80/qtr
per salaried worker
Paid Leave
None
no state SDI/PFML
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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.

Item2026 ValueNotes
Statewide minimum wage$12.00/hrUnchanged since January 1, 2023; no automatic indexing
Tipped cash wage$3.00/hrUp to $9.00 tip credit; employee must earn >$30/month in tips
Youth wage$10.50/hrUnder 18, first 90 days on the job only
HB 246 (2025)Not passedWould have raised the state rate to $17.00/hr and eliminated tip credits
Overtime rule40 hrs/weekFederal FLSA; New Mexico prohibits private-sector comp time in lieu of overtime pay
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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.

Jurisdiction2026 RateNotes
Santa Fe (city & unincorp. county)$15.40/hrTipped $4.62/hr; CPI-indexed each March 1
Las Cruces$13.01/hrTipped $5.20/hr; CPI-indexed each January 1; applies regardless of employer size
Albuquerque (city ordinance rate)$11.85/hrBelow the state floor — the $12.00 state rate governs instead
Albuquerque (prevailing rate)$12.00/hrState minimum wage supersedes the lower city-calculated rate
Albuquerque tipped$7.20/hrCity tipped rate is well above the $3.00 state tipped floor
Rest of New Mexico$12.00/hrStatewide rate applies
2026 minimum wage by jurisdiction
Santa Fe leads by a wide margin
Four different legal wage floors can apply within the same state, depending on the employee's physical work location.
Santa Fe (city & county)
$15.40
Las Cruces
$13.01
Albuquerque (prevailing)
$12.00
New Mexico statewide
$12.00
Bars scaled to Santa Fe's $15.40. Santa Fe and Las Cruces are highlighted as the true local premiums; Albuquerque and the state floor are muted since they land at the same rate.
⚠️
Albuquerque's new ordinance changes the picture starting July 2026
On June 12, 2026, Albuquerque signed Ordinance 26-33, establishing a fresh increase schedule effective July 1, 2026: the standard rate climbs to $13.00/hr in 2027 and $14.00/hr in 2028, with tipped rates rising to $7.20 and $7.30 respectively. Once this schedule takes effect, Albuquerque's local ordinance will finally exceed the state floor — employers should not assume Albuquerque will remain a "state rate applies" city indefinitely.
Albuquerque Ordinance 26-33 schedule
From below the state floor to above it
Signed June 12, 2026, this new schedule flips Albuquerque from a "state rate governs" city to a genuine local-premium city within two years.
$12.00
$13.00
$14.00
2026 (state rate)20272028
Per Albuquerque Ordinance 26-33, signed June 12, 2026, effective July 1, 2026.
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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.

Item2026 ValueNotes
Bracket range1.5% – 5.9%4 graduated brackets
Required certificateFederal Form W-4New Mexico has no separate state withholding form
Local income taxNoneNo New Mexico city or county imposes one
ReciprocityNoneNew Mexico has no reciprocal withholding agreements with any state
Bernalillo County Wellness ActLocal PTO mandateRequires paid time off for employers with 2+ employees in the county
Quarterly Workers' Comp Assessment Fee applies statewide
Separate from income tax, every New Mexico employer with salaried workers owes a quarterly Workers' Compensation Assessment Fee of $4.80 per salaried employee on staff on the last working day of the quarter — split $2.55 employer / $2.25 employee via payroll deduction. It's a small but easy-to-miss line item distinct from both SUI and workers' comp insurance premiums.
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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.

Item2026 ValueNotes
SUI taxable wage base$34,800Up from $33,200 in 2025
Rate range0.33% – 6.4%Based on claims history
New employer rate~1.0%Rises from there based on industry and claims experience
Administering agencyNM DWSDept. of Workforce Solutions
2026 SUI rate range
Where New Mexico employers land
Minimum experienced, new-employer, and maximum experienced rates for 2026.
Maximum (worst experience)
6.4%
New employer
1.0%
Minimum (best experience)
0.33%
Bars scaled to the 6.4% ceiling. Per NM DWS's 2026 rate schedule.
About this guide: This page represents independent editorial analysis prepared for payroll professionals, compiled from publicly available New Mexico state and local government publications (Taxation & Revenue Dept., Dept. of Workforce Solutions, and the cities of Santa Fe, Las Cruces, and Albuquerque). Rates and thresholds change; always verify current figures against the official .gov sources linked above before making payroll decisions. This is not legal or tax advice — consult a qualified advisor for your specific situation. Last reviewed July 2026.
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