The New Jersey Division of Taxation recently released updated withholding tables that reflect the addition of a 15.6% withholding rate on annual wages in excess of $5 million. Employers are instructed to begin using the revised withholding tables with wages paid on or after September 1, 2018.
Revised Withholding Tables
Employers must withhold income tax at a rate of 15.6% from wages, salaries, and other remuneration paid in excess of $5 million during the taxable year no later than September 1, 2018. The higher rate will allow affected employees to catch up on their withholdings for the year.
Employers are not required to apply the increased rate retroactively; the revised withholding tables have already taken prior wage payments into account by increasing the income tax withholding rate.
Due to this late change, the Division of Taxation will not impose penalties for insufficient payment due before September 1st if the insufficiency is a result of the change in the tax rate.
The agency has also released an updated Form NJ-W4, Employee’s Withholding Allowance Certificate, reflecting the revised withholding tables.
Paylocity will apply the updated tables to our system so wages paid on or after September 1st reflect the new rate of 15.6% for annual wages in excess of $5 million.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.