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This means that even if an employee works 12 hours in one workday, he is not entitled to overtime pay unless he works more than 40 hours in that week. New Mexico wage law prohibits employers from requiring an employee to work more than 16 hours in a day, except in emergency situations.

Typically, New Mexico employers are required to pay employees their wages on regular paydays. These paydays can not be more than 16 days apart. More specifically, wages earned between the 1st and 15th day of a calendar month must be paid by the 25th of that month.

Employers must withhold a part of the employee's wages for payment of income tax. New Mexico bases its withholding tax on an estimate of an employee's State income tax liability. The State credits taxes withheld against the employee's actual income tax liability on the New Mexico personal income tax return.

New Mexico imposes a tax on the net income of every resident and on the net income of every nonresident employed or engaged in business in, into or from this state or deriving any income from any property or employment within this state.

Personal Income Tax and Corporate Income Tax forms for the 2021 tax year are now available online. Taxpayers, tax professionals and others can access the new forms and instructions at tax.newmexico.gov by opening the Forms & Publications page and then the Income Taxes folder.

New Mexico has a 5.0 percent state sales tax rate, a max local sales tax rate of 3.813 percent, and an average combined state and local sales tax rate of 7.72 percent. New Mexico's tax system ranks 22nd overall on our 2023 State Business Tax Climate Index.