Payroll on Both Sides of a Border
Payroll in El Paso starts with the federal basics, income tax withholding, Social Security, Medicare and FUTA, plus state unemployment reports to the Texas Workforce Commission, and no state income tax is withheld. What sets El Paso apart is where employees live and work: some cross the bridge from Juárez each morning, some work in New Mexico, and many are military spouses who move every few years. BOMCAS runs payroll for El Paso employers remotely.
TWC and federal payroll basics are on our Texas payroll page; here we cover workers from Juárez and New Mexico and Fort Bliss contracts.
Employees Who Live in Mexico
A person who lives in Juárez and works in El Paso is subject to U.S. payroll tax on wages earned in the U.S., including Social Security and Medicare, as long as they are authorised to work here. Their federal income tax withholding depends on whether they are U.S. citizens, green card holders or nonresident aliens, since nonresidents follow special W-4 rules. They may also owe Mexican tax as Mexican residents, which is their matter, but employers should issue accurate W-2s that they can use there.
Work in New Mexico
Employees who work at sites in New Mexico, even for a few days, may be subject to New Mexico income tax withholding and unemployment insurance there. New Mexico requires registration and withholding for wages earned in the state. We register the employer in New Mexico when needed and split wages by state.
Contracts at Fort Bliss
Service contracts at Fort Bliss often carry Service Contract Act wage determinations with required hourly rates and fringe benefits, and construction projects may require Davis-Bacon wages and weekly certified payroll. We build the wage rates and fringe rules into each contract's payroll setup.
Military Spouses and Veterans
Employers who hire military spouses should know that a spouse may keep a home state other than Texas but still pays no Texas income tax. Spouses working remotely after a move away from Fort Bliss may require registering for withholding wherever they now live. Hiring certain veterans may qualify for the Work Opportunity Tax Credit if Form 8850 is filed within 28 days.
Restaurants and Retail
Restaurant workers paid a tipped cash wage of $2.13 must reach $7.25 an hour including tips. Tips are reported each pay period, mandatory service charges are wages and qualified tips are reported separately for the federal deduction available for 2025 through 2028. Retailers near the bridges often pay overtime in holiday and shopping seasons, and the regular rate must include bonuses and shift pay.
Health Care and Shift Work
Hospitals, clinics and home health agencies are among El Paso's largest employers. Nurses and aides working twelve-hour shifts, on-call time and shift differentials all affect overtime, and employers using the hospital exception to calculate overtime over a 14-day period need a written agreement with each employee. Staffing agencies that place nurses at local hospitals must decide whether they or the hospital are the employer for payroll purposes.
Texas Workforce Commission
An El Paso employer must register with TWC once it pays $1,500 of wages in a calendar quarter, or has a worker in any 20 weeks of a year. The starting rate for most new accounts is 2.7 percent of the first $9,000 paid to each person, with reports due at the end of the month after each quarter. We answer benefit claims and protest charges that should not apply.
Each Pay Period
- Pay, overtime and tips calculated.
- Federal and New Mexico withholding where required.
- Certified payroll for federal projects.
- TWC and federal filings.
- New hire reports and year-end forms.
El Paso Payroll Questions
Do employees who live in Juárez pay U.S. payroll tax?
Yes, on wages earned in the U.S., including Social Security and Medicare. Withholding depends on their tax status.
Do we withhold New Mexico tax for work there?
Generally yes, for wages earned in New Mexico. We register and file there when needed.
Do Fort Bliss contracts set minimum wages?
Many service contracts include Service Contract Act wage determinations, and federal construction jobs may carry Davis-Bacon rates.
Does El Paso have a local payroll tax?
No. Neither the city nor the state withholds income tax from El Paso paychecks.
Talk to BOMCAS About Payroll in El Paso
Payroll entries go to the ledger and wages to the business return. Owner pay is a planning choice, missed deposits go through late filing, employees can get help with their own returns, bars file mixed beverage returns, and staff living in Mexico raise cross-border questions. Our state pages on business returns, individual returns, sales tax, bookkeeping, planning, catching up and international filings explain the Texas rules away from the border, and the Texas overview summarises them.
Tell BOMCAS about your El Paso company or household and we will explain what we would do first and which papers would let us quote. Reach us through the contact page or the form below, call 780-667-5250 or email info@bomcas.ca. Every El Paso service is on the El Paso overview. This page offers general information only, not advice for your case.