Having to comply with unique state taxes and wage laws can make processing payroll doubly daunting. Here’s everything you need to know about these rates and laws for the state of New Jersey.
The Garden State has a slightly complex set of minimum wage rates, which vary based on the nature of an organization’s business. The state also has a Paid Sick Leave program guaranteeing time off to employees within its borders.
When it comes to processing payroll, New Jersey-based organizations must handle the following taxes in addition to those required by the federal government:
The below information was last updated June 16, 2023. It is not intended as legal or tax advice.
New Jersey Minimum Wage Rates
Wage Type
New Jersey Rates
Federal Rates
Minimum Wage
$12.01 (agricultural employers) $12.93 (seasonal and small employers with fewer than 6 employees) $14.13 (most employers) $17.13 (long-term care facility direct care staff)
$7.25
Tipped Minimum Wage
$5.26
$2.13
Actual Tip Credit
$8.87
$5.12
Wage Type
New Jersey Rates
Federal Rates
Minimum Wage
$12.01 (agricultural employers) $12.93 (seasonal and small employers with fewer than 6 employees) $14.13 (most employers) $17.13 (long-term care facility direct care staff)
$7.25
Tipped Minimum Wage
$5.26
$2.13
Actual Tip Credit
$8.87
$5.12
New Jersey State Income Tax (SIT) Rates
New Jersey has a progressive SIT, meaning it varies based on the level of income an employee earns annually. For more details and information, refer to the state’s Tax Table guide (for taxable incomes less than $100,000 annually) or Tax Rate Schedule guide (for taxable incomes greater than $100,000 annually).
Additional New Jersey SIT Details
Supplemental Withholding Computation
Rates vary based on when supplemental wages are paid:
If they’re paid simultaneously with regular wages, total the employee’s regular and supplemental wages and withhold at the appropriate rate for the combined sum.
If supplemental wages are paid at a different time than regular wages, make withholdings from the supplemental wages without any exemption allowances the employee lists on Form NJ-W4.
Valid Filing Statuses
MS = Married / Civil Union Filing Separately
MJ = Married / Civil Union Filing Jointly
S = Single
HH = Head of Household
QW = Qualified Widow(er) / Surviving Civil Union Partner
Rates vary based on when supplemental wages are paid:
If they’re paid simultaneously with regular wages, total the employee’s regular and supplemental wages and withhold at the appropriate rate for the combined sum.
If supplemental wages are paid at a different time than regular wages, make withholdings from the supplemental wages without any exemption allowances the employee lists on Form NJ-W4.
Valid Filing Statuses
MS = Married / Civil Union Filing Separately
MJ = Married / Civil Union Filing Jointly
S = Single
HH = Head of Household
QW = Qualified Widow(er) / Surviving Civil Union Partner
New Jersey State Unemployment Insurance (SUI) Rates
SUI provides unemployment benefits to eligible workers who are unemployed through no fault of their own (as determined by state law) and meet the state’s eligibility requirements.
Yes; must be paid within 30 days after rate notice mailing, unless an extension has been granted for up to an additional 60 days or until October 28 of the current calendar year, whichever is earlier.
Yes; must be paid within 30 days after rate notice mailing, unless an extension has been granted for up to an additional 60 days or until October 28 of the current calendar year, whichever is earlier.
In addition to these rates, the state imposes a Workforce Development Partnership Fund (WDPF) tax (0.0425% for employees and 0.1175% for new employers). This brings the total UI rate to 0.425% for employees and 3.10% for new employers.
New Jersey State Disability Insurance (SDI) Rates
SDI benefits are funded by employees through mandatory payroll deductions from each paycheck. However, in New Jersey, the current SDI rates are 0.0% for employees, while employers have different rates based on how long they’ve been operating.
New Jersey SDI Tax Details
Maximum Taxable Employee Earnings
$156,000
Maximum Taxable Employer Earnings
$41,100
Employee Deduction Rate
0%
Maximum Employee Deduction Amount
$0.00
Rates for Experience Employers
Varies based on the experience rate of the employer
Rates for New Employers
0.50%
New Jersey SDI Tax Details
Maximum Taxable Employee Earnings
$156,000
Maximum Taxable Employer Earnings
$41,100
Employee Deduction Rate
0%
Maximum Employee Deduction Amount
$0.00
Rates for Experience Employers
Varies based on the experience rate of the employer
Rates for New Employers
0.50%
While employees do not currently have a deduction amount for DI, there is an additional Family Leave Insurance program for which employees pay a 0.06% tax.
Miscellaneous New Jersey Tax Information
Reciprocal Agreement(s)
Reciprocal agreements are when workers only pay taxes in the state where they live, not the state where they work. New Jersey currently has a reciprocal agreement with Pennsylvania, which states that Pennsylvania employers are not required to withhold Pennsylvania SIT from New Jersey residents and vice versa (a certificate of non-residence is required).
New Jersey residents working in Pennsylvania are, though, subject to local Pennsylvania withholding taxes, and may have those taxes included when determining how much to withhold from earnings for New Jersey SIT. In the case of Philadelphia, local withholding taxes can be considered to the point where the employee may be exempt from New Jersey income tax withholding altogether.
Paid Sick Leave (PSL)
The state of Massachusetts doesn’t require employers to collect PSL taxes but does have a program providing such leave to eligible employees:
New Jersey PSL Details
Covered Employees
All full-time and part-time employees
Exempt Employees
Individuals employed in the construction industry under a union contract
Per diem healthcare employees
Public employees who are provided with sick leave at full pay under any other state law or rule
Independent contractors who do not meet the definition of an employee under state law
In addition to the state-wide taxes mentioned above, the following cities and localities also have unique tax and/or wage laws.
Newark has a 1% quarterly tax for employers.
Jersey City also has a 1% quarterly tax for nonresident employees if the wages earned are $2,500 or more.
New Jersey Employer Registration
The agencies below can help with your state-based employer registration, including best practices, account numbers, and unemployment information. Contact the Department of Treasury for withholding tax topics and the Department of Labor & Workforce for unemployment tax topics.
Online and Phone Registrations are available. Account numbers will be issued in 3-7 days via the online process or 3 weeks via mail. Note, the same account number for each tax type will be issued under the combined registration.
Online and Phone Registrations are available. Account numbers will be issued in 3-7 days via the online process or 3 weeks via mail. Note, the same account number for each tax type will be issued under the combined registration.
This information is provided as a courtesy and may be updated at any time. It is not intended as legal or tax guidance. If you have questions or concerns, we encourage you to seek the advice of a qualified CPA, Tax Attorney, or Advisor.
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