See federal withholding and FICA for any salary or hourly rate and pay frequency. Because New Hampshire has no state income tax on wages, your take-home is higher than in most states.
New Hampshire payroll is one of the simplest in the country for employees. Every New Hampshire paycheck has just three taxes withheld: federal Social Security (6.2%), Medicare (1.45%), and federal income tax withholding based on Form W-4. New Hampshire has no state income tax on wages, no local or city wage tax, and no mandatory employee-paid disability or paid-family-leave premium. Its last income-type tax, the Interest and Dividends Tax, was repealed effective January 1, 2025, so no personal income tax of any kind remains. Employers, not employees, carry New Hampshire's state-level payroll cost: unemployment insurance on the first $14,000 of each worker's wages plus the business-level Business Enterprise Tax and Business Profits Tax. None is withheld from a paycheck. The one catch is cross-border work: a New Hampshire resident who physically works in Massachusetts pays Massachusetts income tax on those wages. The result for in-state work is a short deduction list and higher take-home pay than an income-tax state at the same gross salary.
- New Hampshire has no state income tax on wages and no local or city wage tax anywhere in the state, so no state or municipal income tax line appears on a New Hampshire pay stub.
- New Hampshire's last income-type tax, the Interest and Dividends Tax, was repealed effective January 1, 2025, leaving no personal income tax of any kind. Unlike Nevada or Texas, there is no constitutional ban, the state has simply never enacted a tax on wages.
- The only taxes withheld from a New Hampshire paycheck are federal: Social Security (6.2%), Medicare (1.45%), and federal income tax withholding under Form W-4 and IRS Publication 15-T.
- The Business Enterprise Tax (0.55% on compensation, interest, and dividends) and the Business Profits Tax (7.5% on taxable business profits) are business-level taxes paid by the employer or business, never withheld from employees.
- Unemployment insurance is funded entirely by employers on the first $14,000 of each employee's wages through New Hampshire Employment Security. Nothing is deducted from employees for it.
- Reported tips are wages: a New Hampshire restaurant, bar, or ski-resort tipped worker owes federal income tax and FICA on tips, but no New Hampshire state tax because there is none.
- Cross-border catch: if you live in New Hampshire but physically work in Massachusetts, Maine, or Vermont, that state taxes the wages you earn there. New Hampshire removes state tax only on income earned in New Hampshire.
What Makes New Hampshire Payroll Different
Federal payroll tax is the same in every state. What changes from one state to the next is the second layer: state income tax withholding, employer unemployment taxes, and any employee social-insurance contributions. New Hampshire sits at the simplest end of that spectrum for employees. It has no state income tax on wages, like Texas and Florida, and unlike Washington or Massachusetts it also has no mandatory employee-paid premiums of any kind. That makes a New Hampshire paycheck about as short as an American paycheck gets.
Where New Hampshire differs from Texas and Florida is on the business side. New Hampshire raises a meaningful share of revenue through two business taxes, the Business Enterprise Tax and the Business Profits Tax, rather than a tax on wages. Neither touches an employee paycheck, but the Business Enterprise Tax in particular rides on the compensation a business pays, so it is the closest New Hampshire analogue to a payroll-linked state tax at the business level. The other New Hampshire wrinkle is geographic: its southern tier sends tens of thousands of commuters into Massachusetts, which taxes those wages even though New Hampshire does not. The federal baseline behind the three taxes an employee actually sees is explained in the how payroll taxes work guide, and the FICA half of it is covered in the what is FICA tax guide.
Employee Withholding Overview in New Hampshire
A New Hampshire employee sees federal taxes only. There is no state income tax line and no mandatory employee premium line. The deductions are all federal.
| Deduction | Who Pays | Rate | Wage Cap |
|---|---|---|---|
| Social Security (federal) | Employee + Employer | 6.2% | $176,100 (2025) / $184,500 (2026) |
| Medicare (federal) | Employee + Employer | 1.45% | None |
| Additional Medicare (federal) | Employee only | 0.9% | Wages over $200K ($250K MFJ) |
| Federal income tax withholding | Employee only | Varies (W-4) | None |
| New Hampshire state income tax | — | None | No state income tax on wages |
| Local / city wage tax | — | None | No local wage tax |
| Employee disability / paid leave / UI | — | None | Employer-funded UI; PFML is voluntary |
The federal lines work identically to any other state. For Social Security, the 2025 wage base is $176,100 (rising to $184,500 for 2026), after which Social Security stops for the year. Medicare has no cap, and the 0.9% Additional Medicare Tax applies to high earners. There are no New Hampshire state lines to add, so once the federal taxes are subtracted, the rest is take-home pay, unless the work is physically performed in a neighboring income-tax state such as Massachusetts.
Why New Hampshire Has No State Income Tax
New Hampshire does not tax wages or salaries, and it never has. For decades the only income New Hampshire taxed was interest and dividends, under a separate 3% Interest and Dividends Tax that applied to investment income above $2,400 for an individual or $4,800 for a joint filer. That tax was repealed effective January 1, 2025 (the repeal was enacted in 2023 and accelerated from its original later date), so for 2025 and later New Hampshire has no personal income tax of any kind. Earned wages were never subject to it in the first place.
Unlike Nevada or Texas, New Hampshire has no constitutional prohibition on an income tax. It has simply chosen, through a longstanding and bipartisan political tradition, never to adopt a broad-based tax on wages or general income. New Hampshire raises revenue through other channels instead, principally local property taxes, the Business Enterprise Tax and Business Profits Tax on businesses, the statewide Meals and Rooms (Rentals) Tax, and selective excise taxes. None of those is withheld from a normal wage paycheck, so the "state tax" line on a New Hampshire pay stub is simply absent.
The New Hampshire Business Enterprise Tax and Business Profits Tax
Instead of an income tax, New Hampshire relies on two business taxes, and it is important to understand that both are paid by the business, not withheld from an employee's paycheck. Neither reduces take-home pay directly, but the Business Enterprise Tax in particular is tied to compensation, so it is the closest New Hampshire has to a payroll-linked state tax.
How the BET and BPT Are Calculated
The Business Enterprise Tax (BET) is 0.55% of the "enterprise value tax base," which is the total compensation, interest, and dividends a business pays, and it applies only once a business exceeds an annual filing threshold (around $298,000 of gross receipts or enterprise value tax base). The Business Profits Tax (BPT) is 7.5% of taxable business profits and applies above a gross-income threshold (around $109,000). A business that pays BET can credit it against its BPT, so the two taxes are coordinated rather than stacked in full.
| Business tax | Rate | Base |
|---|---|---|
| Business Enterprise Tax (BET) | 0.55% | Compensation, interest, and dividends paid (enterprise value tax base) |
| Business Profits Tax (BPT) | 7.5% | Taxable business profits |
Both taxes are filed with the New Hampshire Department of Revenue Administration, separately from unemployment insurance, which is filed with New Hampshire Employment Security. Because the BET rides on the business's total compensation bill rather than on any one worker's pay, it is best thought of as a cost of doing business in New Hampshire, not a paycheck deduction. Employers can fold payroll costs into a cost-to-hire estimate with the employer payroll tax calculator.
Employer Payroll Obligations in New Hampshire
Because there is no state income tax to withhold, a New Hampshire employer's state-level duties are unemployment insurance and the two business taxes (BET and BPT). The federal side, covered in the employer payroll tax obligations guide, includes the matching 6.2% Social Security and 1.45% Medicare plus the Federal Unemployment Tax (FUTA).
| Employer tax | Basis | Wage base |
|---|---|---|
| New Hampshire unemployment (UI) | Experience rated | $14,000 per employee |
| New-employer UI rate | ~1.7% (2026, set quarterly by NHES) | $14,000 per employee |
| Business Enterprise Tax (BET) | 0.55% | Compensation, interest, and dividends paid |
| Business Profits Tax (BPT) | 7.5% | Taxable business profits |
| State income tax withholding | None | No state income tax |
| FUTA (federal, after state credit) | 0.6% | $7,000 per employee |
New Hampshire unemployment tax is assessed on the first $14,000 of each employee's wages, and the employer's rate is set by its experience rating. New Hampshire Employment Security adjusts rates quarterly through a fund-balance-reduction mechanism, so a new employer's effective rate moves from quarter to quarter (about 1.7% for early 2026). None of this is deducted from employee pay. Because there is no state income tax, New Hampshire employers have no state wage-withholding return to file, but they do file unemployment returns quarterly and the BET and BPT with the Department of Revenue Administration.
How Tips Are Taxed for New Hampshire Workers
New Hampshire's tourism economy, from Portsmouth and the seacoast to the Lakes Region and the White Mountain ski resorts, employs thousands of servers, bartenders, and hospitality workers whose pay is largely tips. For payroll purposes, reported tips are wages. A tipped New Hampshire worker owes federal income tax withholding, Social Security (6.2%), and Medicare (1.45%) on reported tips exactly as on base pay. New Hampshire has no state income tax, so no state tax applies to tips, but the federal payroll taxes still do.
New Hampshire does allow a tip credit against its minimum wage for workers who regularly receive tips, so a tipped employee's cash base wage can be lower than the standard minimum with tips making up the difference. That base pay flows through payroll normally, and reported tips are added to it for FICA and federal income tax withholding.
The One Big Beautiful Bill Act created a federal deduction for a portion of qualified tips for tax years 2025 through 2028. It is a below-the-line deduction claimed on the worker's federal return, not a change to paycheck withholding, and it does not reduce Social Security or Medicare tax. In other words, tips are still fully withheld on during the year, and the deduction is settled at filing. Tipped workers can estimate the deduction with the No Tax on Tips Calculator and read the mechanics in the No Tax on Tips guide.
New Hampshire Has No Local Wage Income Tax
No New Hampshire city or county withholds a local wage income tax from employees. A worker in Manchester, Nashua, Concord, Derry, Dover, Rochester, Portsmouth, or anywhere else in the state pays no municipal or county income tax line. New Hampshire's local revenue comes from property taxes, not a tax on wages.
This matters because several of the states National Tax Tools covers do have local wage taxes: Ohio and Pennsylvania have city income taxes, Kentucky has local occupational taxes on gross wages, and Michigan has cities like Detroit that levy their own tax. New Hampshire has none. So even in its largest cities, a New Hampshire pay stub shows only the three federal taxes and no local line at all.
How Take-Home Pay Works in New Hampshire
The calculation sequence runs from gross pay down to net pay, and it is shorter in New Hampshire than almost anywhere else because there are no state lines to subtract (for work performed in New Hampshire).
- Start with gross wages for the pay period, including any reported tips.
- Apply federal income tax withholding using the Form W-4 and IRS Publication 15-T.
- Subtract Social Security (6.2%, up to the annual wage base) and Medicare (1.45%) on FICA wages.
- For work performed in New Hampshire there is no state income tax, no local tax, and no mandatory employee premium to subtract.
- The remainder is net pay.
To see exact figures for a specific salary or hourly rate and pay frequency, use the New Hampshire paycheck calculator or the general take-home pay calculator for a full pre-tax benefits stack.
New Hampshire Supplemental Wage Withholding
Supplemental wages are payments outside regular salary: bonuses, commissions, overtime, sales awards, and back pay. New Hampshire has no state income tax, so there is no state supplemental rate to apply.
- No New Hampshire income tax on supplemental wages, because there is no state income tax at all.
- Federal income tax withholding on supplemental wages is a separate calculation set by the IRS, typically a flat 22% on amounts under $1 million, and Social Security and Medicare still apply under their own rules.
- Because there is no state layer, a New Hampshire bonus keeps more of its value than the same bonus paid in an income-tax state.
For the federal supplemental math on a bonus, use the Bonus Tax Calculator and see the Bonus Tax Withholding Guide.
New Hampshire Reporting and Payment
New Hampshire employers report wages and pay unemployment premiums to New Hampshire Employment Security on a quarterly schedule, and they file the Business Enterprise Tax and Business Profits Tax with the Department of Revenue Administration (typically annually, with estimated payments during the year). Because there is no state income tax, there is no state wage-withholding return to file, so the state-level compliance burden is limited to unemployment reporting and the business-tax filings. The federal deposit schedule for income tax withholding and FICA is covered separately in the payroll tax deadlines guide.
New employees must be reported to the New Hampshire new hire reporting program shortly after the hire date, as in every state.
New Hampshire Payroll Quick Facts (2025-2026)
| State income tax | None (Interest & Dividends Tax repealed effective Jan 1, 2025) |
| Local wage tax | None anywhere in the state |
| Employee disability / paid leave | None mandatory (PFML is voluntary) |
| Employee unemployment | None (employer-funded) |
| Employer UI base | $14,000 per employee |
| New-employer UI rate | ~1.7% (2026); set quarterly by NHES via fund-balance reduction |
| Business Enterprise Tax (BET) | 0.55% on compensation, interest, and dividends paid |
| Business Profits Tax (BPT) | 7.5% on taxable business profits |
| Social Security wage base | $176,100 (2025) / $184,500 (2026) |
| Withheld from an NH paycheck | Federal income tax, Social Security, Medicare only |
| Agencies | Dept. of Revenue Administration (BET/BPT); NH Employment Security (UI) |
At LMN Tax Inc, the recurring New Hampshire question is the Massachusetts border. New Hampshire has no state income tax on wages, but Massachusetts taxes wages earned inside its borders at a flat 5.0% regardless of residence, and tens of thousands of New Hampshire residents commute south to work. New clients who move to New Hampshire expecting a fully tax-free paycheck are often surprised their Massachusetts employer still withholds Massachusetts tax. We walk them through the rule: New Hampshire residency removes state tax only on income earned in New Hampshire; wages earned physically in Massachusetts, Maine, or Vermont are taxed by that state. The second issue is the flip side of a simple paycheck: with no state refund to fall back on and no state withholding cushioning a federal shortfall, getting the federal W-4 right matters more, not less. We see this most with dual-income households, where each employer withholds at the married rate assuming its salary is the only income and the couple lands in a higher federal bracket than either employer expected. The fix is the Multiple Jobs Worksheet on Form W-4, and it takes fifteen minutes. On the employer side, the most common confusion is the Business Enterprise Tax, which new business owners sometimes mistake for an employee deduction. It is not: the BET is the business's own 0.55% tax on the compensation, interest, and dividends it pays, and it never appears on a worker's stub.
Real-World Example: A New Hampshire Biweekly Paycheck
Priya earns $65,000 per year and works in Manchester, New Hampshire. She is paid biweekly (26 pay periods), files Single on her W-4, and has no pre-tax contributions. The federal figures below follow the 2025 Publication 15-T percentage method.
Gross pay per period: $65,000 / 26 = $2,500.00
| Line | Amount |
|---|---|
| Gross wages | $2,500.00 |
| Federal income tax withholding | −$227.46 |
| Social Security (6.2%) | −$155.00 |
| Medicare (1.45%) | −$36.25 |
| New Hampshire state income tax | $0.00 |
| Net pay | $2,081.29 |
There is no state or local income tax line, so the only deductions are the three federal taxes. The federal withholding of $227.46 comes from annualizing the $2,500 biweekly gross to $65,000, subtracting the $8,600 Single allowance to reach a $56,400 adjusted annual wage, applying the Publication 15-T Single schedule ($5,578.50 plus 22% of the amount over $54,875), and dividing the $5,914.00 annual result by 26. If Priya instead commuted to a job in Massachusetts, that state would tax the wages at its flat 5.0% rate, roughly $125 per check (somewhat less after Massachusetts's own withholding deductions), so the in-state New Hampshire paycheck is meaningfully larger. Run your own numbers with the New Hampshire paycheck calculator.
When New Hampshire Payroll Logic Does Not Apply
- Working across state lines: If you live in New Hampshire but physically work for an employer in Massachusetts, Maine, or Vermont, that state taxes the wages earned there and the employer withholds its state income tax (Massachusetts at a flat 5.0%). New Hampshire itself still withholds nothing on New Hampshire-earned wages.
- Remote workers for out-of-state employers: A worker living and working in New Hampshire for an out-of-state company generally owes no state income tax on those New Hampshire-performed wages, but the employer must still register for New Hampshire unemployment and report the wages.
- Tipped hospitality workers: Reported tips are wages for federal income tax and FICA, even though New Hampshire has no state tax on them. Under-reporting tips leaves federal withholding short at filing.
- Pre-tax deductions: Traditional 401(k) deferrals and Section 125 medical premiums reduce the wages subject to federal income tax withholding, so actual federal withholding is lower than a gross-only estimate. FICA still rides on most of those wages.
- High earners and the caps: Once wages pass the Social Security wage base, Social Security stops for the year while Medicare continues, and the 0.9% Additional Medicare Tax begins above $200,000. Late-year paychecks for high earners look different from early-year ones even without any state tax.
- Self-employed and 1099 workers: Independent contractors are not subject to New Hampshire payroll withholding and handle federal tax through estimated payments, as in the self-employment tax guide.
Frequently Asked Questions
If you are a New Hampshire employee, use the New Hampshire paycheck calculator to see federal withholding and FICA for your salary and pay frequency, then confirm the lines on your stub. Because there is no state refund to fall back on, make sure your federal W-4 is right, and complete the Multiple Jobs Worksheet if you or your spouse hold more than one job. If you commute to a job in Massachusetts, Maine, or Vermont, expect that state's income tax to be withheld on those wages. Tipped workers should report tips fully and consider Step 4c extra withholding.
If you are a New Hampshire employer, confirm your New Hampshire Employment Security unemployment account is active, check your quarterly unemployment rate notice, and file the Business Enterprise Tax and Business Profits Tax with the Department of Revenue Administration. Remember there is no state wage-withholding return to file. Model your full cost-to-hire with the employer payroll tax calculator and review the employer payroll tax obligations guide.
- New Hampshire Department of Revenue Administration: Repeal of the Interest & Dividends Tax now in effect (effective January 1, 2025; prior 3% rate on interest and dividends above $2,400 single / $4,800 joint; no personal income tax on wages)
- New Hampshire Department of Revenue Administration: Overview of New Hampshire Taxes (Business Enterprise Tax 0.55%, Business Profits Tax 7.5%)
- New Hampshire Employment Security: Employer Claims & Taxes ($14,000 taxable wage base; experience-rated rates set quarterly)
- IRS Publication 15 (Employer's Tax Guide)
- IRS Publication 15-T: Federal Income Tax Withholding Methods
- IRS Topic 751: Social Security and Medicare Withholding Rates
- IRS Topic 560: Additional Medicare Tax