How does New Hampshire state income tax and unemployment insurance work in 2026?
New Hampshire has no state income tax in 2026. What employers fund instead is unemployment insurance: a $14,000 wage base at a 2.70% new-employer rate, plus the federal stack.
· New Hampshire, United States guide
Illustration · Manchester, New Hampshire
New Hampshire is the rare state that is genuinely simple on the withholding line. There is no state income tax on wages, and as of 1 January 2025 there is no tax on interest and dividends either, so the old Interest and Dividends Tax is gone. That means zero state income tax withholding on your New Hampshire payroll in 2026, and no state W-4 equivalent.
Your employer cost sits almost entirely in unemployment insurance. There is no New Hampshire state payroll tax, so UI runs on a $14,000 wage base at a new-employer rate of 2.70%, up to about $378 per employee a year, and you run the full federal stack on top.
Does New Hampshire have a state income tax in 2026?
No. New Hampshire has no tax on wages or earned income, and as of 1 January 2025 the Interest and Dividends Tax was fully repealed, so there is zero state income tax withholding on your New Hampshire payroll in 2026. There is no New Hampshire W-4 and no state bracket table.
Until the repeal, New Hampshire taxed interest and dividends at 3% above $2,400 for individuals. That tax no longer applies, and 2025 returns are not filed.
For your employee, zero state income tax is real take-home: a Manchester hire keeps more of the same gross salary than a hire across the border in Massachusetts, which carries a flat 5% rate. For you as the employer, the withholding side of payroll is the lightest in the country, because there is nothing to withhold for the state and no state reconciliation return to file.
The repeal is the part that catches people out. The old Interest and Dividends Tax, administered by the NH Department of Revenue Administration, was 3% on interest and dividend income above $2,400 for individuals and $4,800 for joint filers. It was a tax on investment income, never on wages, and it ended on 1 January 2025. New Hampshire now has no individual income tax of any kind. What it does have is an unemployment insurance obligation, and that is where your New Hampshire employer cost actually lives. See how Vermont handles its state income tax and UI if you are comparing New England hiring options.
What payroll taxes do New Hampshire employers actually pay?
New Hampshire has no state payroll tax and no state income tax withholding. The only state-level employer payroll obligation is unemployment insurance, paid on a $14,000 wage base. Everything else you fund is federal.
That makes New Hampshire one of the lighter states to run. Your state line items are UI contributions and nothing more, on top of the federal stack that applies to every US hire.
You owe UI on the first $14,000 of each employee's wages. New-employer rate: 2.70%. No state income tax withholding. No state payroll tax. File quarterly with NH Employment Security.
The trap is assuming "no income tax" means "no New Hampshire payroll obligation". You still register with New Hampshire Employment Security for unemployment insurance and file UI returns each quarter, and you still run the full federal stack of Social Security, Medicare and FUTA. Check the New Hampshire wage and overtime rules for what else sits on the employer side of the ledger.
The upside is real. With no state withholding and no state payroll tax, your New Hampshire compliance reduces to one state registration and a quarterly UI filing. Review the paid family and sick leave obligations separately, since those sit outside the payroll tax stack.
What is New Hampshire's unemployment insurance wage base and rate for 2026?
New Hampshire's UI taxable wage base is $14,000 per employee for 2026. New employers pay a UI rate of 2.70%, a maximum of about $378 per employee a year.
Experience-rated employers pay between 0.1% and 8.5%, set by their own claims history once they leave the new-employer rate.
You pay UI on the first $14,000 of each employee's wages per calendar year; everything above that is not taxed for UI. A new employer holds the 2.70% rate until it builds an experience record, then moves onto a rate set by its own claims history, anywhere from 0.1% to 8.5%. Register and file via the NH Employment Security employer portal.
The federal layer sits on top. FUTA is 6% on the first $7,000 of wages, less the full credit for compliant state UI payers, leaving an effective 0.6%. So the real federal unemployment cost is small once your New Hampshire state UI is paid on time. Paying UI on time and in full is what preserves the FUTA credit, so a missed quarterly filing costs more than the late fee. Full FUTA detail is at IRS FUTA Credit Reduction.
What other payroll rules apply to New Hampshire employees?
You run the full federal stack: Social Security at 6.2% to $184,500, Medicare at 1.45%, and FUTA. New Hampshire's minimum wage tracks the federal floor at $7.25 an hour.
New Hampshire's Paid Family and Medical Leave is voluntary, not a mandate: there is no payroll deduction unless an employer or worker opts in. Tipped staff may be paid a cash wage of $3.27 with a $3.98 tip credit.
Two points catch out-of-state employers. First, New Hampshire PFML is an opt-in insurance programme run through a private carrier, not a state-run mandate funded by payroll tax. Employers can buy a group plan and claim a tax credit, but there is no compulsory contribution, so for most teams there is nothing to withhold. See the full picture in the New Hampshire paid family and sick leave guide. Second, a new unpaid parental medical leave rule took effect on 1 January 2026, giving eligible staff at employers with 20 or more workers up to 25 hours of unpaid leave for childbirth-related appointments in a child's first year. Federal FMLA at 50 employees is the only other job-protected family leave layer.
The $7.25 minimum wage has tracked the federal rate since 2009 and there is no automatic inflation adjustment. New Hampshire does follow the federal tip-credit model, so a restaurant or hotel may pay tipped staff a cash wage of $3.27 as long as tips bring them to the full $7.25. For wages, overtime thresholds, and meal-break rules, see the New Hampshire wage and overtime page. Social Security and Medicare rates are set federally and apply to every hire regardless of state.
How Teamed runs New Hampshire payroll end to end
Teamed becomes your legal employer of record in New Hampshire for from $599 per employee per month flat. Zero FX mark-up. Statutory employer cost passes through at cost, itemised on every invoice.
You hire the person. Teamed registers with New Hampshire Employment Security, files unemployment insurance quarterly, runs the federal stack, and tracks the new unpaid parental leave rule. Everything runs on one platform.
Real HR and legal experts handle your New Hampshire hires and know the quarterly UI cadence, the $14,000 wage base, and the voluntary PFML rules. An actual person, not a chatbot or a pooled queue. You see every cost: UI contributions and federal employer taxes pass through at cost, itemised and auditable on every invoice. No setup fee, no exit fee.
Contractor onboarding, EOR payroll, and entity graduation all live on one platform. A New Hampshire contractor who converts to W-2 keeps their record, and that same employee can graduate to your own US entity when the model no longer fits, without switching systems. Because New Hampshire has no state income tax and no state payroll tax, the withholding burden is light and the cost case for your own entity arrives later per headcount than in a high-tax state like Massachusetts. Use the Crossover Calculator to see the month the model flips, or the Employer Cost Calculator to see your full New Hampshire payroll cost today. Questions? Talk to an expert.
If you are weighing New Hampshire against other low-tax states in the region, see how Vermont's UI and income tax obligations compare. Also check the New Hampshire termination and at-will rules before you hire, since the withholding being simple does not mean the off-boarding is.
The mistake we see on New Hampshire is assuming no state income tax means no payroll work. The withholding column really is empty after the interest and dividends repeal, but unemployment insurance, federal taxes, and the new unpaid parental leave rule are all live obligations. Budget for the boxes that still carry the cost.
New Hampshire has no state income tax in 2026, and the interest and dividends tax ended in January 2025.
What stays is unemployment insurance on a $14,000 wage base at a 2.70% new-employer rate, plus the federal stack.
Light is not the same as nothing. That gap is the part we run for you.
