What payroll deductions are employers required to withhold?

Required Payroll Deductions for Employers in New Hampshire

In New Hampshire, employers must withhold specific payroll taxes and deductions to comply with federal and state regulations. Understanding these requirements is essential for accurate payroll processing and compliance.

Federal Payroll Deductions

• Federal Income Tax: Employers must withhold federal income tax based on employee W-4 forms and IRS tax tables.
• Social Security Tax: Employers withhold 6.2% of wages up to the annual wage base limit.
• Medicare Tax: Employers withhold 1.45% of all wages, with an additional 0.9% for high earners as applicable.
• Federal Unemployment Tax (FUTA): Paid by employers but not withheld from employee wages.

New Hampshire State Payroll Deductions

• State Income Tax: New Hampshire does not impose a general state income tax, so no withholding is required for wages.
• State Unemployment Insurance (SUI): Employers pay state unemployment taxes; these are employer-paid only and not withheld from employee wages.
• Other Deductions: Employers may withhold voluntary deductions such as health insurance premiums, retirement contributions, or wage garnishments as authorized.

Operational Considerations

• Accurate Recordkeeping: Maintain detailed payroll records to track withheld amounts and employer contributions.
• Timely Reporting: Submit required payroll tax filings and deposits to the IRS according to federal schedules.
• Employee Classification: Ensure proper classification of workers to apply correct withholding rules.
• Automation: Use payroll software to automate withholding calculations and compliance reporting.

As of 2026, staying updated with any federal changes to payroll tax rates or thresholds is critical for ongoing compliance.