New Hampshire state payroll taxes are pretty simple. Along with states like Alaska, Florida, Washington, and Wyoming, it’s one of the few states in the US that does not require residents to pay income tax.
Income tax on wages and salaries, at least. New Hampshire does levy taxes on income generated from dividends and interest. There’s also a corporate tax law that businesses need to know about.
New Hampshire Payroll Tax Overview
If your business operates in the Granite State or you have employees who live there, there are some things to know about New Hampshire payroll tax.
Here’s a breakdown of the essentials:
- State Income Tax: New Hampshire charges a 4% tax rate on income earned from interest and dividends, but not from regular payroll income. However, the state is gradually phasing this tax out. Any interest or dividends earned after December 31, 2026 will be tax-free.
- Local Taxes: There are no local taxes, such as sales tax, in the Granite State.
- Minimum Wage: With no state minimum wage, New Hampshire defaults to the federal minimum of $7.25 an hour. Tipped employees who make at least $30 a month in tips are exempt from this. They must receive a base rate not less than 45 percent of the minimum wage.
- State Unemployment Tax: New employers pay a 2.7% tax on a taxable wage base of $14,000 to New Hampshire’s Security Unemployment Insurance (SUI) Program. Employers with a positive balance in the unemployment fund may receive a reduction to this tax rate. You can learn more about New Hampshire’s SUI on the New Hampshire Employment Security website.
- Workers Compensation: All New Hampshire employers must obtain workers’ compensation insurance before any employees are hired. This law includes full- and part-time employees, including family members who work for you.
- Meal Breaks: Employers must provide a 30-minute meal break for each employee after five consecutive hours of work.
New Hampshire also has a Paid Family and Medical Leave (PFML) program that can affect payroll deductions. The PFML is a voluntary paid leave program that gives employees six weeks of paid leave each year at a rate of 60% of an employee’s wages.
Employees can purchase a plan on their own, but they’ll have to pay the full premium. If you provide this benefit as an employer, you can share the cost of the premium with employees, taking payroll deductions. Or, you can cover all the costs.
It’s also important to note that even though New Hampshire doesn’t levy income taxes on individuals, it does have a corporate income tax. The state requires all businesses to pay a 0.55% Business Enterprise Tax (BET) and a 7.5% Business Profits Tax (BPT).
The BET tax applies to any business that makes more than $281,000 in gross income or an enterprise value of $281,000. The BPT tax applies to any business that makes more than $103,000 in gross income.
If you’re wondering what type of business must pay these taxes, here’s a non-comprehensive list:
- Limited liability companies
- Business trusts
- Real estate trusts
- Any organization formed for the purpose of earning gains or profits
Employers can pay taxes online via the state’s Granite Tax Connect portal. Remember that these are just New Hampshire’s state-specific payroll tax laws. There are still plenty of federal taxes and laws to pay attention to as well.
Filing New Hampshire Tax and Wage Reports
Even though there’s no income tax to withhold from your employees’ paychecks, there are a few requirements to keep in mind. If you meet the qualifications for paying into the State Unemployment Insurance fund, you’ll need to fill out a Tax and Wage Report every quarter.
You’ll file the form with the New Hampshire Employment Security’s Unemployment Compensation Bureau.
The Tax and Wage report must be filed within one month of the end of a quarter:
- 1st Quarter: Ends March 31st, report due April 30th
- 2nd Quarter: Ends June 30th, report due July 31st
- 3rd Quarter: Ends September 30th, report due October 31st
- 4th Quarter: Ends December 31st, report due January 31st
Employers have a grace period of two business days after the official due date to get the report filed.
New Hampshire Paycheck Laws
Like many states, New Hampshire has specific rules for how you must pay employees.
Let’s start with the state’s recordkeeping laws as they relate to paychecks.
When you hire an employee in New Hampshire, you must write down the employee’s rate of pay at the time of hire. Policies relating to fringe benefits need to be put down in writing, too, and the documents must have the employee’s signature.
If you make any changes to the pay or benefits after any period of time, you must document this change and receive an employee signature to confirm it.
The state requires employers to keep a record of hours worked and wages paid for at least three years. Employees and former employees can request access to their personnel file at any time.
As for pay frequency, employers must pay employees weekly or biweekly. If you’d rather pay employees semi-monthly or monthly, you’ll need to submit an official request. Each pay period, New Hampshire employers must provide a pay stub with a written statement of:
- Hours worked
- Wages paid
- Insurance premiums deducted
- Taxes deducted
- Other legitimate deductions made
If an employee is terminated, the final paycheck is due within 72 hours. But if an employee resigns or quits, the final wages are due on the next regular payday.
However, if an employee gives at least one pay period’s notice before a quit date, they must be paid within 72 hours of their final day on the job. Keep in mind that if you offer PTO and your policy says you will pay out any unused PTO upon separation of employment, you are bound by the law to do exactly that.
New Hire Reporting for New Hampshire Payroll
The moment you hire a new employee in New Hampshire, you should be gearing up to file a New Hire Report with the state’s employment security department. All New Hire Reports are due within 20 days of an employee or independent contractor’s start date.
Yes, you read that right—independent contractors are included in this law! If you expect to pay them $2,500 or more during the calendar year, that is.
Along with your Federal Employer Identification Number and New Hampshire Employment Security (NHES) account number, you’ll need to include:
- Employer’s name
- Employer’s address
- Social Security Number (Not FEIN #)
- Employee’s/contractor’s complete name
- Type of Hire (employee or contractor)
- Employee’s home/contractor’s home or physical business address
- First day of hire
- Work state
We suggest filing this information within the first few days of hiring a new employee or contractor. That way, you’ll get it out of the way and won’t have to worry about it for 20 full days.
Here’s more New Hire Reporting information if you need it.
Are you feeling overwhelmed by the idea of keeping up with payroll tax rules? A quality payroll service can help you keep track of both state and federal regulations for your New Hampshire business dealings.