How Much Tax Is Taken Out of an NYC Paycheck?
Unravel the various tax deductions from your New York City paycheck, understanding the different government levels involved and key factors influencing your take-home pay.
When you receive a paycheck, the gross amount you earned is reduced by various deductions, with a significant portion allocated to taxes. For individuals employed in New York City, these deductions include taxes levied by multiple levels of government. Understanding these various withholdings provides clarity on how your net pay is determined.
Federal Paycheck Taxes
Federal taxes are a universal component of paycheck deductions. The primary federal tax is the federal income tax, which operates on a progressive system where higher income levels are subject to higher marginal tax rates. The amount withheld for federal income tax is influenced by the information an employee provides on their Form W-4, Employee’s Withholding Certificate.
Beyond income tax, employees also contribute to Social Security and Medicare, collectively known as Federal Insurance Contributions Act (FICA) taxes. For 2025, the Social Security tax rate is 6.2% for both the employee and employer, applied to earnings up to an annual wage base limit of $176,100. This tax funds retirement, disability, and survivor benefits.
The Medicare tax rate for 2025 remains at 1.45% for both employees and employers, applied to all covered earnings without a wage base limit. An additional Medicare tax of 0.9% applies to individual earned income exceeding $200,000, or $250,000 for married couples filing jointly, bringing the total Medicare tax rate for earnings above these thresholds to 2.35%. Employers are required to withhold this additional amount once an employee’s wages surpass $200,000 in a calendar year.
New York State Paycheck Taxes
New York State imposes its own income tax. It utilizes a progressive income tax system, featuring multiple tax brackets that range from 4% to 10.9% for the 2024 tax year, reported on returns filed in 2025. The specific tax rate applied to a portion of income depends on the individual’s taxable income level.
An employee’s filing status significantly impacts the calculation of New York State income tax withholding. Statuses such as single, married filing jointly, married filing separately, head of household, or qualifying widow(er) with dependent child each have different income brackets and standard deduction amounts. The amount of state tax withheld is determined by the income and information provided by the employee on Form IT-2104, New York State Employee’s Withholding Allowance Certificate. This form serves a similar purpose to the federal W-4, allowing employees to specify their marital status and claim allowances to adjust withholding.
New York City Paycheck Taxes
Residents of New York City are subject to a specific personal income tax in addition to federal and New York State taxes. This tax is structured progressively, with rates and income brackets. For 2025, the New York City income tax rates for individuals range from 3.078% for lower incomes up to 3.876% for higher income levels. This tax applies to New York City residents, and the appropriate withholding is guided by the information submitted on the IT-2104 form.
Another distinct tax affecting paychecks in the region is the Metropolitan Commuter Transportation Mobility Tax (MCTMT), often called the “MTA Surcharge.” This tax applies to certain employers and self-employed individuals within the Metropolitan Commuter Transportation District (MCTD), which includes New York City’s five boroughs and several surrounding counties. While primarily an employer-paid tax based on payroll expenses, it can appear as a separate line item on pay stubs for qualifying employees whose employers are subject to it. Effective July 1, 2025, there are changes to the MCTMT rates, with larger employers in Zone 1 (New York City) seeing an increase in their top rate from 0.60% to 0.895%.
Factors Affecting Your Tax Withholding
The actual amount of tax withheld from a paycheck is influenced by several variables that interact across federal, state, and city tax calculations. An individual’s income level directly impacts withholding because tax systems are progressive. Higher income results in a larger tax liability and more tax withheld, as portions of income fall into higher tax brackets.
The information provided on the federal Form W-4 and the New York State Form IT-2104 plays a significant role in determining withholding amounts. These forms allow individuals to specify their filing status, claim dependents, account for other income, and elect additional withholding or deductions. Accurately completing these forms helps ensure that the amount of tax withheld closely matches the individual’s actual tax liability.
Contributions to pre-tax deductions also reduce the amount of income subject to tax withholding. Common pre-tax deductions include contributions to 401(k) retirement plans, health insurance premiums, and flexible spending accounts. By lowering an employee’s taxable income, these deductions can decrease the amount of federal, state, and city income taxes withheld. While 401(k) contributions reduce income subject to income tax, they do not reduce the income subject to FICA taxes.
The frequency of pay periods can affect the per-paycheck withholding amount, even if the annual tax liability remains constant. For instance, bi-weekly paychecks will have smaller per-period withholdings compared to monthly paychecks for the same annual income. The total annual tax obligation does not change based on pay frequency, but the amount deducted from each individual paycheck adjusts accordingly to spread the liability across the year.