Payroll Tax Reminders

NYS Paid Sick Leave:

New York’s paid sick leave law requires employers to provide up to 56 hours (7 days) of paid sick leave to employees. This requirement is based on the employer’s number of employees and net income. For example, employers with 5 to 99 employees must provide up to 40 hours of paid sick leave per calendar year. Additional details available on the NYS website at: https://www.ny.gov/programs/new-york-paid-sick-leave

NYS Paid Family Leave:

In 2023, eligible employees can take up to 12 weeks of paid family leave (PFL). These benefits have been extended now to domestic workers who were hired directly by private homeowners. These employees must be working 20 or more hours a week and have been employed by the private homeowner for 26 consecutive weeks. Employees taking paid family leave will receive 67% of their average weekly wage (AWW), up to a cap of 67% of the current New York State Average Weekly Wage (NYSAWW) of $1,688.19. The maximum weekly benefit for 2023 is $1,131.08. For 2024, the NYSAWW is $1,718.15, which means the maximum weekly benefit is $1,151.16.

In 2023, the contribution is 0.455% of an employee’s gross wages each pay period.
The maximum annual contribution is $399.43. Employees earning less than the current NYSAWW of $1,688.19 will contribute less than the annual cap of $399.43, consistent with their actual wages.

For 2024, the contribution rate goes down to 0.373% of employee’s gross wages, capped at
an annual maximum of $333.25. Also new is the list of family members a worker can take Paid Family Leave which will now include siblings with a serious health condition. Additional details available on the NYS website at: https://paidfamilyleave.ny.gov/2024.

Overtime Rules For Exempt Employees:

New York State salary thresholds for exempt employees are as follows. Administrative and executive employees, located outside of New York City and downstate counties, must earn $1,064.25 per week to be exempt from overtime pay, in 2023. The exempt salary provisions provide scheduled annual increases for New York employees. More information can be found at:

https://dol.ny.gov/system/files/documents/2023/04/minimum-wage-ppt-for-2022_4-5-23.pdf.

Due Dates for W-2s:

The due date for filing 2023 Forms W-2 and W-3 with the Social Security Administration (SSA) is January 31, 2024. This is the same date that W-2 forms are due to the employees. Extensions of time to file Form W-2 with the SSA, for a period of 30 days, can be obtained by filing Form 8809. However, the IRS will only grant this extension in extraordinary circumstances or catastrophe.

The IRS has also increased penalty amounts for failing to file and furnish correct W-2 forms by the due date. Instructions for Forms W-2 and W-3 are available on the IRS website at: www.irs.gov/pub/irs-pdf/iw2w3.pdf.

Additional Reminders:

• It is very important to not ignore any information received from your payroll processing company regarding year-end processing. This will help them to prepare complete and accurate W-2s for your employees. It is costly to prepare the W-2 and year-end reports
  a second time.
• When preparing 2023 W-2 forms or providing your payroll company with W-2 information, be sure to include all the taxable income and benefits an employee earns. Examples are:
• Personal use of a company vehicle.
• Health insurance and dental and long-term care premiums paid on behalf of a greater than 2% S-corporation shareholder (exempt for FICA and FUTA).
• PS-58 cost for group term life insurance benefits in excess of $50,000.
• Dependent care benefits.
• Employee pension information.
• Be sure to include disability income (third-party sick pay) an employee earns. It is important to report this information to your payroll processing company before year-end to be included in fourth-quarter reports and W-2s.
• FICA (Social Security) withholding rates remain unchanged at 7.65%, comprised of 6.2% for Social Security and 1.45% for Medicare. The employer is required to contribute a matching amount when making the tax deposit. The self-employed rate also remains at 15.3%, comprised of 12.4% Social Security and 2.9% Medicare. The maximum amount of taxable annual earnings subject to the Social Security tax and self-employment tax is $160,200 for 2023, increasing to $168,600 for 2024. All earnings are subject to the Medicare tax.
• Additional Medicare Tax: Employees are also subject to a 0.9% additional Medicare tax on all wages and self-employment income in excess of $200,000 for single filers and $250,000 for joint filers.
• The minimum-wage rate for New York State employees, outside of NYC and Long Island, for 2023 is $14.20 per hour, increasing to $15.00 January 1, 2024.
• The minimum wage for tipped food-services workers is $9.45 per hour if they earn $4.75 per hour in tips. This increases to $10.00 per hour if they earn $5.00 per hour in tips.
• Overtime for tipped workers is calculated at time-and-one-half the minimum wage rate, less the applicable tip credit. For example, the overtime rate for tipped food services workers is $16.55 [($14.20 x 1.5) – $4.75] per hour, increasing to $17.50 [($15.00 x 1.5) – $5.00] per hour on December 31, 2023.
• Minimum wage for fast-food employees in NYS is $15.00 per hour.
• Effective December 31, 2022, minimum wage for home care aide employees, outside of New York City, is $16.20 per hour ($2.00 above basic minimum wage). This will increase to $17.55 on January 1, 2024.
• More information on New York minimum wage rates can be found at: https://dol.ny.gov/minimum-wage-0.
• The amount that can be deducted per week for disability insurance remains at .005% of gross wages with a maximum of $.60 per week.
• The Federal unemployment base wage will remain at $7,000 for taxable wages. The federal unemployment rate is .006%.
• The New York State unemployment wage base is $12,300 and $12,500 for 2023 and 2024, respectively. New York will be notifying you of your 2024 unemployment rate around February 1, 2024. If you use a payroll service such as ADP or Paychex, be sure to send them this notification.
• All new employees will need to complete and return to you:
• W-4form for federal withholdings.
• IT-2104 form for New York state withholdings.
• Form I-9 –Employment Eligibility Verification. Be sure that you are using the current revision of this form with an expiration date of July 31, 2026. Current version can be obtained at https://www.uscis.gov/i-9.
• You are also required to provide all new employees with the New York State Notice and Acknowledgement of Pay Rate and Payday.
• Federal tax deposits: If you are NOT using a payroll service for payroll tax deposits, you will need to enroll your business and make payments electronically. Information on Electronic Federal Tax Payment System (EFTPS), including how to enroll, can be found at https://www.eftps.gov/eftps or by calling EFTPS Customer Service at 1‑800‑555‑4477.