NYC income tax rates depend on your filing status and total earnings

New York City does not have its own income tax. Instead, you pay New York State income tax, which varies by income bracket and filing status. The state tax rate ranges from 4% on the lowest earners to 10.9% on those earning over $1,000,000 per year. If you live or work in New York City, you also pay New York City's Unincorporated Business Tax (UBT) if you are self-employed or own a business — but this is separate from income tax and applies only to business income, not wages.

For wage earners in NYC, the state income tax is what appears on your pay stub. The exact amount depends on your total household income for the year. New York State publishes tax tables each year that show the tax owed at each income level. You can find the current year's rates on the New York State Department of Taxation and Finance website.

Key Takeaways

  • New York City residents pay New York State income tax, which ranges from 4% to 10.9% depending on income, not a separate city income tax.
  • Self-employed people and business owners in NYC pay the Unincorporated Business Tax on business income in addition to state income tax on wages or distributions.
  • Sales tax in NYC is 8.875%, combining the state rate, city rate, and local taxes.
  • Property tax in NYC is assessed by the city and varies by borough and property type, with rates set annually by the Department of Finance.

Sales tax in NYC is 8.875% on most purchases

When you buy something in New York City, you pay 8.875% sales tax on most items. This rate combines New York State's 4% sales tax, New York City's 4.5% tax, and a 0.375% local tax. The rate is the same across all five boroughs — Manhattan, Brooklyn, Queens, the Bronx, and Staten Island.

Some items are exempt from sales tax in New York, including most groceries, prescription medications, and clothing under $110. Restaurant meals, prepared foods, and non-prescription items are taxed at the full 8.875% rate. If you buy something online from an out-of-state seller, sales tax rules depend on whether that seller has a physical presence in New York — many large retailers now collect NYC sales tax on online orders.

Property tax in NYC is based on assessed value and borough location

Property tax in New York City is set by the city's Department of Finance and varies significantly by borough and property type. The city assesses the value of your property and applies a tax rate to that assessed value. Unlike income or sales tax, there is no single percentage rate — instead, the city divides properties into four classes, and each class has its own assessment ratio and tax rate.

Class 1 covers one-, two-, and three-family homes and small residential buildings. Class 2 covers larger apartment buildings. Class 3 covers utility companies. Class 4 covers all other properties, including commercial and industrial buildings. A one-family home in Manhattan will have a different tax bill than the same home in Staten Island because the assessed values and tax rates differ by location. The Department of Finance publishes property tax rates each year, and you can look up your own property's assessed value and tax bill on the city's website.

Self-employed workers and business owners pay the Unincorporated Business Tax

If you are self-employed or own a business in New York City, you owe the Unincorporated Business Tax (UBT) on your business income. This is a city tax separate from state income tax. The UBT rate is 4% of your net business income, though there are exemptions and deductions available depending on your business structure and income level.

Sole proprietors, partnerships, and limited liability companies (LLCs) typically owe UBT. Corporations incorporated in New York pay corporate income tax instead, which is a different tax. If your business income is below a certain threshold — currently $4,000 per year — you may not owe UBT, but you should check the current rules with the New York City Department of Finance or a tax professional because thresholds change.

Payroll taxes and employer withholding in NYC

If you are an employee in New York City, your employer withholds federal income tax, Social Security tax, Medicare tax, and New York State income tax from your paycheck. The employer does not withhold a separate NYC tax — the state income tax is what covers your city obligation. Your employer calculates the withholding based on the W-4 form you fill out when you start the job.

If you are self-employed, you are responsible for paying self-employment tax (Social Security and Medicare) yourself, usually in quarterly estimated payments to the IRS. You also owe New York State income tax and the NYC Unincorporated Business Tax on your net business income. Many self-employed people work with a tax professional or use tax software to calculate these amounts correctly.

Other NYC taxes: cigarettes, hotel rooms, and utilities

New York City and New York State impose additional taxes on specific items beyond income, sales, and property tax. Cigarettes carry an excise tax of $4.35 per pack in New York State, plus an additional $1.50 per pack in NYC, making them among the most heavily taxed items in the country. Hotel rooms in NYC are subject to a 14.75% occupancy tax plus a $2 per night fee.

Utilities such as electricity and natural gas are subject to a 4% utility tax in NYC. Parking garages and lots are subject to a 5.5% tax on the parking fee. These taxes are usually included in the final bill you see, so you do not pay them separately — they are built into the price.

How to find your specific tax obligations

Your exact tax burden depends on your income, where you live within NYC, what you own, and whether you are self-employed. The New York State Department of Taxation and Finance website has current tax rates, forms, and instructions. The New York City Department of Finance website covers property tax, UBT, and other city-specific taxes.

If you are unsure whether you owe a particular tax or how much you should pay, a tax professional or accountant familiar with New York taxes can review your situation. Many public libraries in NYC also offer free tax preparation help during tax season through the IRS Volunteer Income Tax information (VITA) program.

Frequently Asked Questions

Does NYC have its own income tax separate from New York State?

No. New York City does not have a separate income tax. Residents pay New York State income tax, which ranges from 4% to 10.9% depending on income. Self-employed people also pay the Unincorporated Business Tax on business income, but this is not an income tax — it is a tax on business earnings.

Why is the sales tax rate 8.875% and not a round number?

The rate combines three separate taxes: New York State's 4% sales tax, New York City's 4.5% tax, and a 0.375% local tax. Each was set at different times, and together they total 8.875%. This is the standard rate across all five boroughs.

How do I find out what my property tax bill is?

You can look up your property tax bill on the New York City Department of Finance website by entering your address or block and lot number. You can also call 311 or visit a Department of Finance office in person. Your bill is mailed to you annually, usually in the fall.

Do I have to pay NYC taxes if I work there but live outside the city?

You pay New York State income tax on wages earned in New York, regardless of where you live. If you live in another state, you may also owe taxes to that state, though New York has reciprocal agreements with some neighboring states to avoid double taxation. Check with your home state's tax authority.

What is the difference between the Unincorporated Business Tax and corporate income tax?

The Unincorporated Business Tax applies to sole proprietors, partnerships, and LLCs — businesses that are not incorporated. Corporate income tax applies to businesses incorporated in New York. The rates and rules differ, so your business structure determines which tax you owe.