New Hampshire is one of the easier states to set up and run a trade business. There is no state income tax, and no statewide contractor license for most building work, so your taxes and your paperwork are lighter than in a lot of places. The rules that still bite are the ones that run on a clock: mechanic's liens, permits, and sales tax on the wrong kind of job.
Each section below points to a tool that runs your exact numbers for New Hampshire.
Tax in New Hampshire
New Hampshire has no state income tax, so the only income tax on your trade profit is federal. That means no state return, no state estimated payments, and no state tax to set aside. You still owe federal income tax and self-employment tax and still have to make quarterly federal estimated payments, so do not treat the state tax you are not paying as spare cash.
New Hampshire has no statewide sales tax, so you do not add sales tax to your work. Some local areas can still levy their own, so check locally if you work in a taxing town.
Work out what to hold back on the Tax Set-Aside Calculator, which runs the federal and self-employment numbers for New Hampshire.
Getting paid: liens and retainage
A mechanic's lien is the tool that actually gets a New Hampshire contractor paid, and in New Hampshire you generally have to record it within 120 days of your last day of furnishing. Miss it and you lose the lien, so the dates matter.
Enforcing it has its own clock. The attachment is the step, and it has to happen inside the same 120 days - there is no separate later window. Nobody can force you to move sooner: New Hampshire has no demand-to-commence provision. Note some published guides state a 90-day deadline to sue; that figure is not in RSA 447 and we could not source it. Work out your dates on the Lien Deadline tool, and if they are close, get an attorney to confirm them against the statute (N.H. RSA 447:5, 447:6, 447:9, 447:10, 447:15, 447:18).
On money held back as retainage, here is where New Hampshire lands:
- Private work: No statutory cap on private work in New Hampshire. Whatever your contract says governs, so read the withholding clause.
- Public work: 10% of all partial payments.
- Release: Private: no number of days is set at all. It falls due on whatever the contract says. Public: no number of days is set at all. It falls due on the state agency has accepted the contract.
- Prompt pay: New Hampshire has no general prompt-pay statute and no statutory interest on late-released retainage. What Chapter 447 does give a subcontractor is a trust-like protection: once you serve the statutory notice, the owner must hold back enough to pay your claim.
And the step-down is not the same thing as a right. New Hampshire cuts the rate to 0% when the project is 50% complete, after which no additional retainage is withheld from partial payments. That drop is automatic once the condition is met, so it is money you are entitled to have back before the end of the job. The rule describes reductions only and carries no reinstatement language.
Check the Retainage Calculator before you sign a contract that holds back more.
Free New Hampshire retainage letters
Three letters written for New Hampshire's rules, with the state's own release clock and its statutory citation already in them. Fill one in on screen and download it as a PDF or a Word file.
- Retainage Release Request (New Hampshire), for when the job is done and the money has not come back
- Retainage Overdue: Demand for Payment (New Hampshire), for when the release date has passed and nothing has arrived
- Retainage Held Above the Cap: Challenge Letter (New Hampshire), for when more is being held than the state appears to permit
Do you need a license in New Hampshire?
New Hampshire has no statewide general contractor license, so for most building work there is no state license to get. That is one of the things that makes New Hampshire straightforward to start in. It does not mean no rules at all: the state still licenses specific trades like electrical and plumbing, and your city or county can require its own registration or permits, so always check locally before you take a job on.
Trade licenses for electrical, plumbing and HVAC are usually separate and often required even where a GC license is not. See what applies to your trade on the Contractor License Checker.
Building codes and permits
New Hampshire adopts its building codes statewide, so the rules travel with you across the state. Editions still move, so confirm yours with the building department before you price a job.
- Homes: 2021 or 2024, applicant's choice until 31 December 2026, after which 2024 stands alone
- Electrical: 2023 (effective 1 July 2025; not moving with the 2024 cycle)
- Energy: 2018, retained deliberately after the review board declined the 2024 edition
- Plumbing: 2021 IPC for commercial, moving to 2024 / the IRC chapters 25 to 33 for one- and two-family dwellings
New Hampshire runs one state code with no local opt-out: it applies in every municipality without further local modification, and a town may only amend the technical content with the Building Code Review Board's confirmation. Right now the state is mid-transition. The 2024 editions took effect on 1 July 2026 and until 31 December 2026 an applicant may elect either the 2021 or the 2024 set, though not a mixture, so both are currently valid. The electrical code is not part of that move and stays on the 2023 NEC, with arc-fault requirements capped by statute at the 2014 level whatever edition is adopted. The energy code has been deliberately held at 2018 through three cycles. Where a town has no enforcement mechanism at all the state fire marshal is the default authority, though one- and two-family dwellings are exempt from the notice requirement.
Source: RSA chapter 155-A, in particular 155-A:1 IV, 155-A:2, 155-A:3 and 155-A:10; HB 1159 of the 2026 session (2024-edition update and concurrency window); RSA 153:27-a (mechanical licensing board). Read against that source on 2026-08-25.
Check a specific job on the permit tool.
Pay and workers' comp
The minimum wage in New Hampshire is the federal $7.25 an hour. That is the floor for anyone you put on the books, and it is worth confirming against the state labor department each year because several states step their rate mid-year. Check a rate on the minimum-wage tool.
Workers' comp rates in New Hampshire are not published as a single figure; they turn on your trade's class code and your payroll. Get a realistic range on the Workers' Comp Estimator, then get a real quote.
If a client will not pay
If a client will not pay, you can sue for up to $10,000 in New Hampshire's Small Claims (Circuit Court). That covers most unpaid-invoice disputes for a small outfit; a bigger claim goes to regular civil court where you will probably want an attorney. Walk through whether filing is worth it on the Small Claims checker.
The clock runs the other way too: a client generally has 3 years to sue you over the work under a written contract in New Hampshire, with an absolute cutoff 8 years after the job is substantially complete. Work out your exposure on the Warranty & Claim Deadline tool.
Common questions
Does New Hampshire have a state income tax?
No. New Hampshire has no state income tax, so the only income tax on your trade profit is federal. You still owe federal income tax and self-employment tax and still make quarterly federal estimated payments.
Do I need a contractor's license in New Hampshire?
For most general building work, no. New Hampshire has no statewide general contractor license. The state still licenses specific trades and your city or county may require its own registration, so check both.
What is the small claims limit in New Hampshire?
You can sue for up to $10,000 in New Hampshire's Small Claims (Circuit Court). The filing fee is typically $90 to $145. Larger claims go to regular civil court.
How long do I have to file a mechanic's lien in New Hampshire?
Generally 120 days from your last day of furnishing. Miss it and you lose the lien. Work your own dates out on the Lien Deadline tool.
How much retainage can be held back in New Hampshire?
Public, state-aided water pollution control: 10% of all partial payments. Run your own figure on the Retainage Calculator.
Are there free New Hampshire contract and payment forms?
Yes. This page links 3 retainage letters written to New Hampshire's own release clock and carrying its statutory citation. They are free, there is no sign-up, and you fill one in on screen and download it as a PDF or a Word file.
What is the minimum wage in New Hampshire?
$7.25 an hour, the federal floor. Check a specific job on the minimum-wage tool.
The honest bit
These are the 2026 rules for New Hampshire as they stood when this guide was written, and they change: legislatures move thresholds, deadlines and rates every year. Treat this as general guidance to point you in the right direction, not legal, tax or financial advice. Verify anything you rely on at the source (the IRS, the New Hampshire tax and licensing agencies, and your local building department) or with a professional. Where New Hampshire does something unusual, the detail is called out above rather than glossed over.
Related: Tax Set-Aside Calculator · Mechanic's Lien Deadline · Contractor License Checker · Small Claims checker · Working in Your State
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Sources
- New Hampshire statutes (gc.nh.gov) · Mechanics lien notice, filing and enforcement deadlines in New Hampshire: N.H. RSA 447:5, 447:6, 447:9, 447:10, 447:15, 447:18. Verified against this authority on 2026-08-15.
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