New Mexico paychecks in 2026: what changed

New Mexico's rates did not change for 2026, but the untaxed first slice of pay grew.

The changes

• New federal withholding tables. The IRS updated Publication 15-T for 2026, including changes from the 2025 tax law. The standard deduction is $16,100 single, $32,200 married filing jointly, and $24,150 head of household.
• Social Security wage base: $184,500 (up from $176,100). If you earn more, Social Security stops later in the year.
• Tips and overtime deductions for 2025–2028 — see below.
• Rates: 1.5% to 5.9%, the same as last year.
• Untaxed first slice in the annual table: $8,050 for Single (was $7,500), $16,100 for Married (was $15,000) and $12,075 for Head of household (was $11,250).
• Workers' Compensation fee: $2.25 a quarter from your pay, up from $2.00 before July 1, 2025.
• Minimum wage: still $12.00, with a $3.00 cash wage for tipped employees.

Tips and overtime in 2026

New federal deductions apply for 2025 through 2028: up to $25,000 for qualified tips, and up to $12,500 ($25,000 for joint filers) for the extra "half" of time-and-a-half overtime. Both phase out above $150,000 of income ($300,000 joint).

These are deductions on your tax return. Your employer still takes Social Security and Medicare out of tips and overtime, and still withholds income tax unless you tell it otherwise. If you expect to claim them, you can put the expected amount in Step 4(b) of your W-4 (and in the Step 4(b) box above) so less income tax is withheld during the year.

Work out your 2026 New Mexico paycheck →

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Sources

• IRS Publication 15-T (2026), Federal Income Tax Withholding Methods — Worksheet 1A and the annual percentage-method tables
• IRS Publication 15 (2026), Employer's Tax Guide — Social Security and Medicare rates
• Social Security Administration — 2026 wage base of $184,500
• IRS — tips and overtime deductions
• New Mexico Taxation and Revenue Department — FYI-104, New Mexico Withholding Tax, Effective January 1, 2026 (REV. 11/2025) — TRD RealFile public-files copy; federal W-4 used, no allowances; percentage-method Tables 1–8 (single, married, head of household), 1.5%–5.9%; worked example $1,000 weekly married + $20 → $41.80; 5.9% flat supplemental rate
• New Mexico Taxation and Revenue Department — FYI-104, Effective January 1, 2025 (REV. 11/2024) — 2025 Table 7 first taxed rows $7,500 single, $15,000 married, $11,250 head of household; same rates
• New Mexico Taxation and Revenue Department — Wage Withholding Tax — employers refer to the wage withholding tables in FYI-104
• NMSA 1978 § 52-5-19 — Fee for funding administration (Workers' Compensation) — employee fee deducted from wages: $2.00 before July 1, 2025; $2.25 July 1, 2025 – June 30, 2028; $2.38 from July 1, 2028; per covered employee on the last working day of each quarter
• New Mexico Taxation and Revenue Department — Withholding Tax and Workers' Compensation — employer $2.55 and employee $2.25 per quarter from July 1, 2025; reported on Form TRD-41431
• New Mexico Workers' Compensation Administration — FAQs — quarterly assessment $4.80 per covered employee: $2.25 paid by workers, $2.55 by employers; employers with fewer than three employees generally not covered (construction excepted)
• NMSA 1978 § 50-4-22 — Minimum wages — $12.00 from January 1, 2023; tipped employees (more than $30 a month in tips) at least $3.00 cash; overtime at 1.5× over 40 hours a week
• U.S. Department of Labor — Minimum Wages for Tipped Employees — New Mexico: $12.00 combined rate, $9.00 tip credit, $3.00 cash wage; tipped employee = more than $30 a month
• U.S. Department of Labor — State Minimum Wage Laws — New Mexico $12.00; premium pay after 40 hours a week
• City of Albuquerque — Notice regarding 2026 minimum wage rate — example of a local minimum wage ordinance; not calculated here
• NMSA 1978 § 50-4-2 — Regular pay days — pay days not more than 16 days apart; professional, administrative, executive and outside sales employees may be paid monthly
• NMSA 1978 § 50-4-4 — Discharged employees — fixed wages within 5 days of discharge; task, piece or commission pay within 10 days
• NMSA 1978 § 50-4-5 — Employees who quit — due at the next regular payday
• NMSA 1978 § 50-4-8 — Investigation of wage claims — the director (now Workforce Solutions Department) investigates and helps enforce wage claims