Skip to main content
Department of Taxation and Finance

Employer Compensation Expense Program (ECEP)

ECET Web File is now available in your Business Online Services account. From the ≡ Services menu, select Employment and withholding taxes, then choose ECET web file. For important payment information, see ACH debit block.

The Employer Compensation Expense Program (ECEP) established a new optional Employer Compensation Expense Tax (ECET) that employers can elect to pay if they have employees that earn over $40,000 annually in wages and compensation in New York State.

Employee wages covered by the ECET

If you elect into the ECEP for the year, you will pay the ECET on the New York payroll expense that exceeds $40,000 for the calendar year paid to each employee employed in New York State.

Rate of tax

The ECET is being phased in over three years as follows: 

Tax rates
For quarters in tax year: the rate of tax is:
2019 1 1/2%
2020 3%
2021 and after 5%


  • An employer will make an annual affirmative election to participate in the ECEP no later than December 1 to pay the optional tax in the following calendar year.
  • Enrollment for tax year 2020 will begin on October 1, 2019.
  • An employer will make their election using their Business Online Services account. See Employer Compensation Expense Program (ECEP) Employer Election.
  • If you elect, you should communicate to your employees:
    • that you made the election for the year,
    • that covered employees making over $40,000 may be eligible for a tax credit when filing their income tax return and should review their IT-2104, Employee’s Withholding Allowance Certificate, to adjust their withholding, and
    • the amount of wages subject to ECET for the year (the Tax Department’s website will provide a sample template that can be used to communicate this amount to covered employees).

When to file and pay

  • Once a covered employee’s wages paid exceed $40,000, you must begin remitting the ECET due.
  • The ECET will be paid on the same dates that your withholding tax payments are required to be made.
  • The quarterly returns are due on the same dates that your withholding tax returns are due:
Quarters and due dates
Quarter Due date*
January 1 - March 31 April 30
April 1 - June 30 July 31
July 1 - September 30 October 31
October 1 - December 31 January 31

* When the due date falls on a Saturday, Sunday, or legal holiday, you may report and pay on the next business day.

How to file and pay 

For more information, see:

Sign up for our subscription service for e-mail updates about new information or check this page again.