New York Take-Home Pay Guide: State Tax, NYC Surcharge, and PFL (2026)

New York is distinctive among US states in that many residents are subject to two separate income taxes: New York State income tax (which applies to all NY residents) and New York City income tax surcharge (which applies additionally to anyone who lives within the five boroughs of New York City). This stacked structure makes New York City one of the highest total-tax locations in the United States for wage earners.

New York State income tax applies regardless of where in New York you live. NYC residents pay the state tax and then an additional city surcharge on top. Residents of Buffalo, Albany, or any other upstate city pay only the state income tax — not the NYC surcharge.

New York uses a progressive income tax with nine brackets. The rates below are from the NY Department of Taxation and Finance withholding schedules verified in the 2026 employer withholding data:

These are marginal rates. Most middle-income New Yorkers pay an effective state income tax rate in the range of 5–6.5%. For the exact withholding, use the New York paycheck calculator.

NYC residents pay an additional income tax surcharge on top of New York State tax. The NYC tax has four brackets: 3.078%, 3.762%, 3.819%, and 3.876%. For most middle-income NYC workers, the effective NYC rate is approximately 3.4–3.7%.

This surcharge applies only to NYC residents — defined as people who make New York City their domicile. If you live in New Jersey, Connecticut, or Westchester and commute to an NYC office, you do not owe the NYC tax. (You may, however, owe New York State income tax on wages earned in New York through the state's nonresident rules.) Yonkers residents pay a separate Yonkers surcharge in addition to state income tax.

Combined, a New York City resident in the 5–6% effective state bracket also pays 3.4–3.7% in city tax, for a total state+local effective income tax burden of roughly 8.5–10% before considering federal taxes.

New York's Paid Family Leave program is funded by an employee-only payroll deduction. The NY PFL rate is set annually by the state's Department of Financial Services. It is applied as a small percentage of weekly wages up to a statewide average weekly wage cap. The deduction appears as a separate line on New York pay stubs.

NY PFL funds up to 12 weeks of paid leave for bonding with a new child, caring for a seriously ill family member, or when a family member is deployed for military service. The program pays 67% of the employee's average weekly wage, capped at 67% of the statewide average. The PFL deduction is considered a state and local tax payment — it may be deductible on your federal return if you itemize.

New Jersey residents who commute to New York City offices are subject to New York State income tax on their New York wages, but they do not owe the NYC income tax surcharge (which is limited to NYC residents). New Jersey also taxes its residents on all worldwide income, including the NY wages. The result: NJ-NYC commuters owe NY State tax on NYC wages and NJ tax on all income — but NJ provides a credit for taxes paid to New York, substantially eliminating double taxation.

The net effect is that NJ-NYC commuters pay approximately the higher of NY State or NJ income tax rates on their wages (since the credit prevents true double taxation), but they avoid the additional NYC surcharge. A similar analysis applies to Connecticut and Westchester commuters. For any cross-border work situation, consulting a CPA is advisable — the interaction of state credits can be complex.

Remote workers whose employer is in New York face the additional risk of the convenience of employer rule, potentially owing NY State tax even if they never set foot in a New York office.

What is the New York City income tax rate in 2026?

New York City charges a separate income tax surcharge for city residents, ranging from 3.078% to 3.876% in 2026 depending on income level. This is in addition to New York State income tax. NYC residents therefore pay both state income tax and the city surcharge, making NYC one of the highest total tax locations in the United States.

Do NJ residents working in NYC pay NYC income tax?

No. New Jersey residents who work in New York City pay New York State income tax on their NYC wages but do NOT pay the New York City income tax surcharge. The NYC surcharge applies only to people who live within the five boroughs of New York City. NJ also taxes NJ residents on all income but provides a credit for taxes paid to New York.

What is New York Paid Family Leave and how much is the deduction?

New York Paid Family Leave (NY PFL) is an employee-funded program that provides paid leave for bonding with a new child, caring for a seriously ill family member, or when a family member is deployed abroad. Employees pay a small percentage of their wages (set annually by the state) up to a wage cap. The deduction appears on your pay stub and is deductible as a state income tax payment on your federal return.