See federal withholding, FICA, the graduated New Jersey income tax, and the UI, disability, and family leave lines for any pay frequency.
New Jersey payroll taxes stack federal taxes with a graduated state income tax and three employee social-insurance contributions. Every New Jersey paycheck has federal Social Security (6.2%), Medicare (1.45%), federal income tax withholding, and New Jersey Gross Income Tax withheld through the NJ-WT rate tables (statutory rates run 1.4% to 10.75%). On top of that, New Jersey deducts unemployment and workforce (UI/WF/SWF), temporary disability (TDI), and family leave insurance (FLI) from employee wages, something almost no other state does. New Jersey has no local wage income tax withheld from employees.
- New Jersey income tax is graduated, from 1.4% on the first $20,000 up to 10.75% over $1,000,000. Employers withhold using the NJ-WT rate tables (A through E), not the statutory rates directly.
- The rate table comes from Form NJ-W4: Single and Married-Separate use Rate A, while Married-Joint, Head of Household, and Qualifying Widow(er) default to Rate B. The wage chart can point two-earner households to a higher letter.
- New Jersey deducts three employee contributions almost unique among the states: UI/WF/SWF at 0.425% on the first $44,800, disability (TDI) at 0.19%, and family leave (FLI) at 0.23%, each on the first $171,100 for 2026.
- New Jersey has no municipal wage income tax deducted from employees. Newark's payroll tax is an employer tax on total payroll, not a paycheck deduction.
- New Jersey has a reciprocal agreement with Pennsylvania only. A Pennsylvania resident working in New Jersey files Form NJ-165 so Pennsylvania tax is withheld instead.
- Employers carry the federal employer taxes plus a much larger unemployment and disability contribution to the New Jersey Department of Labor; the employee lines are separate and smaller.
What Makes New Jersey Payroll Different
Federal payroll tax is the same in every state. What changes from one state to the next is the second layer: state income tax withholding, employer unemployment taxes, and any employee social-insurance contributions. New Jersey sits at the more complex end of that range. Its income tax is graduated with a high top rate, and, unusually, it deducts three separate social-insurance contributions directly from employee wages.
Most states fund unemployment, disability, and family leave entirely through employer taxes. New Jersey is one of the few that takes a worker share for all three: unemployment and workforce funds (UI/WF/SWF), temporary disability (TDI), and family leave insurance (FLI). A New Jersey pay stub therefore has more lines than a flat-tax, employer-funded state like Pennsylvania or a no-income-tax state like Florida. The federal baseline behind all of this is explained in the how payroll taxes work guide.
Employee Withholding Overview in New Jersey
A New Jersey employee sees federal taxes, a graduated state income tax, and three New Jersey contribution lines. There is no local wage tax line. The deductions fall into three groups: federal taxes, New Jersey Gross Income Tax, and the New Jersey social-insurance contributions.
| Deduction | Who Pays | Rate (2026) | Wage Cap |
|---|---|---|---|
| Social Security (federal) | Employee + Employer | 6.2% | $184,500 |
| Medicare (federal) | Employee + Employer | 1.45% | None |
| Additional Medicare (federal) | Employee only | 0.9% | Wages over $200K ($250K MFJ) |
| Federal income tax withholding | Employee only | Varies (W-4) | None |
| NJ Gross Income Tax | Employee only | 1.4% to 10.75% | None (graduated) |
| NJ UI/WF/SWF | Employee (+ employer) | 0.425% | $44,800 |
| NJ Disability (TDI) | Employee | 0.19% | $171,100 |
| NJ Family Leave (FLI) | Employee only | 0.23% | $171,100 |
The federal lines work identically to any other state. For Social Security, the 2026 wage base is $184,500, after which Social Security stops for the year. Medicare has no cap. What is unique to New Jersey is the three-part social-insurance stack: a small unemployment line that caps early at $44,800, a disability line, and a family leave line, all deducted from the worker in addition to the graduated income tax.
How Is New Jersey Income Tax Withheld?
New Jersey has a graduated Gross Income Tax. The statutory rates that appear on the Form NJ-1040 return run from 1.4% up to 10.75%, but employers do not apply those rates directly. Instead they withhold using the NJ-WT percentage-method rate tables, five schedules labeled A through E that front-load a slightly higher rate (1.5% to 11.8%) so that withholding tracks the eventual liability across a range of situations.
| Taxable income (single) | Statutory rate |
|---|---|
| $0 to $20,000 | 1.4% |
| $20,001 to $35,000 | 1.75% |
| $35,001 to $40,000 | 3.5% |
| $40,001 to $75,000 | 5.525% |
| $75,001 to $500,000 | 6.37% |
| $500,001 to $1,000,000 | 8.97% |
| Over $1,000,000 | 10.75% |
Married/Civil Union couples filing jointly, Heads of Household, and Qualifying Widow(er)s use wider brackets, adding a 2.45% band between $50,000 and $70,000. The federal Form W-4 sets federal withholding, covered in the W-4 withholding explained guide, while Form NJ-W4 sets the New Jersey rate table and allowances. Because the withholding tables are estimates, the final New Jersey tax is settled on Form NJ-1040.
New Jersey Withholding: NJ-W4 and the Wage Chart
Form NJ-W4 is New Jersey's version of the federal W-4, and it controls two things: which rate table the employer uses and how many allowances reduce your wages.
Rate Table from Filing Status
If you check Single or Married/Civil Union Partner Separate on Form NJ-W4, the employer withholds at Rate A. If you check Married/Civil Union Couple Joint, Head of Household, or Qualifying Widow(er) and do not complete the wage chart, the employer withholds at Rate B. Each allowance you claim removes $1,000 from your annual New Jersey taxable wages before the rate table is applied.
The Wage Chart (Line 3)
This is the New Jersey feature that catches two-earner households. If you are married or head of household and your spouse also works, or you have more than one job, and the combined wages exceed $50,000, the NJ-W4 wage chart directs you to a higher rate table (C, D, or E). Without it, both jobs are withheld at Rate B as if each were the only income, and combined withholding falls short of the true graduated rate, producing a balance due at filing. The New Jersey paycheck calculator lets you choose the wage-chart letter directly so you can see the difference.
New Jersey Unemployment, Disability, and Family Leave (Employee)
This is the layer that makes New Jersey payroll distinctive. New Jersey deducts three social-insurance contributions from employee wages, where most states deduct none. For 2026 the worker rates and caps are:
| Contribution | 2026 rate | Wage base | Max for the year |
|---|---|---|---|
| UI/WF/SWF (unemployment + workforce) | 0.425% | $44,800 | $190.40 |
| Temporary Disability (TDI) | 0.19% | $171,100 | $325.09 |
| Family Leave Insurance (FLI) | 0.23% | $171,100 | $393.53 |
The UI/WF/SWF line caps early because its wage base is only $44,800, so most full-time workers finish paying it partway through the year and the deduction then stops. The TDI and FLI lines ride on the higher $171,100 base and fund benefits the worker can actually draw on: short-term disability leave and paid family leave. These rates are set each year by the New Jersey Department of Labor. For 2025 they were slightly different: TDI was 0.23% and FLI was 0.33%, on a $165,400 base, which is why the paycheck calculator is labeled for the 2025 tax year to match the 2025 federal withholding tables.
Employer Payroll Obligations in New Jersey
New Jersey employers carry the federal employer taxes plus a larger share of the state unemployment and disability system. The federal side, covered in the employer payroll tax obligations guide, includes the matching 6.2% Social Security and 1.45% Medicare plus Federal Unemployment Tax (FUTA). On top of that, New Jersey adds employer unemployment and disability contributions.
| Employer tax | Basis | Wage base |
|---|---|---|
| Employer UI/WF/SWF | Experience-rated | $44,800 (2026) |
| Employer Temporary Disability | Experience-rated (or private plan) | $44,800 (2026, employer base) |
| New employer UI rate | 2.6825% (2025-26) | $43,300 (2025) |
| FUTA (federal, after state credit) | 0.6% | $7,000 per employee |
The employer unemployment and disability contributions are assessed on a fiscal-year basis (July 1 to June 30) and depend on the employer's experience rating. Family Leave Insurance is funded entirely by the employee, so there is no employer FLI contribution. These employer costs are never deducted from employee pay. The combined cost-to-hire can be modeled with the employer payroll tax calculator.
New Jersey Has No Local Wage Income Tax
Unlike neighboring New York and Pennsylvania, New Jersey has no municipal wage income tax deducted from employees. A worker in Newark, Jersey City, or Camden pays the state Gross Income Tax and the three social-insurance contributions, but no city income tax line.
The common point of confusion is the Newark payroll tax. Newark does levy a 1% payroll tax, but it is an employer tax on the employer's total Newark payroll, not a deduction from any individual paycheck. So a New Jersey employee moving from New York City, where a separate city income tax is withheld, will not see an equivalent line in New Jersey. Its absence is correct, not a payroll error.
Pennsylvania Reciprocity
New Jersey maintains one reciprocal income tax agreement, with Pennsylvania. Under it, wage income is taxed by the worker's state of residence, not the state where the work is performed.
A Pennsylvania resident who works in New Jersey files Form NJ-165 with the New Jersey employer to claim exemption from New Jersey withholding, so Pennsylvania's flat tax is withheld instead. A New Jersey resident who works in Pennsylvania is treated the same way in reverse. The reciprocity covers the wage income tax only. The New Jersey disability, family leave, and unemployment contributions follow where the employment is covered, so a Pennsylvania commuter working for a New Jersey employer can still see New Jersey TDI, FLI, and UI lines even with the NJ-165 on file. New York has no such agreement with New Jersey, so a New Jersey resident who works in New York City pays New York tax and claims a resident credit at home.
New Jersey Supplemental Wage Withholding
Supplemental wages are payments outside regular salary: bonuses, commissions, overtime, sales awards, and back pay. New Jersey withholds Gross Income Tax on supplemental wages, and the three social-insurance contributions apply until their wage bases are reached.
- New Jersey income tax on supplemental wages: withheld under the NJ-WT methods; the state does not use the flat federal-style supplemental rate.
- UI/WF/SWF, TDI, and FLI: apply to supplemental wages the same as regular wages, up to each contribution's annual cap.
- Federal income tax withholding on supplemental wages is a separate calculation set by the IRS, and Social Security and Medicare still apply under their own rules.
For the federal supplemental math on a bonus, use the Bonus Tax Calculator.
New Jersey Filing and Payment Frequency
New Jersey employers report and remit withheld Gross Income Tax through the state's online system. Withholding is deposited on a weekly, monthly, or quarterly schedule depending on the amount withheld, using Form NJ-927 (or NJ-927-W for weekly filers) for quarterly reporting and the WR-30 wage report. The federal deposit schedule is covered separately in the payroll tax deadlines guide.
Unemployment, disability, and family leave contributions are reported and paid with the same NJ-927 and WR-30 filings through the Division of Employer Accounts. New employees must be reported to the New Jersey new hire directory within 20 days of the hire date.
How Take-Home Pay Works in New Jersey
The calculation sequence runs from gross pay down to net pay. New Jersey income tax starts from New Jersey taxable wages, and the three social-insurance contributions ride on gross wages up to their caps.
- Start with gross wages for the pay period.
- Apply federal income tax withholding using the Form W-4 and IRS Publication 15-T.
- Subtract $1,000 per NJ-W4 allowance, then apply the NJ-WT rate table for your filing status or wage-chart letter to get the New Jersey income tax.
- Apply the UI/WF/SWF rate (0.425%) up to the $44,800 base, the TDI rate up to the $171,100 base, and the FLI rate up to the $171,100 base.
- Subtract Social Security (6.2%) and Medicare (1.45%) on FICA wages. The remainder is net pay.
To see exact figures for a specific salary, filing status, wage-chart letter, and pay frequency, use the New Jersey paycheck calculator or the general take-home pay calculator for a full pre-tax benefits stack.
What New Jersey Employees Should Check on a Pay Stub
- NJ income tax line: Confirm New Jersey Gross Income Tax is withheld. If you are married with a working spouse and see very little state tax, you may be under-withheld on Rate B and should look at the NJ-W4 wage chart.
- Three contribution lines: Look for NJ UI/WF/SWF, NJ DI (disability), and NJ FLI (family leave). All three are normal New Jersey deductions, and the UI line should stop once your year-to-date wages pass the UI wage base.
- No local tax line: New Jersey has no city income tax, so there should be no municipal wage line even if you work in Newark or Jersey City.
- FICA: Confirm Social Security at 6.2% (until $184,500 of wages for 2026) and Medicare at 1.45% with no cap.
- Pennsylvania residents: If you live in Pennsylvania and filed Form NJ-165, confirm New Jersey income tax is not being withheld and Pennsylvania tax is.
What New Jersey Employers Should Verify Before Running Payroll
- State registration: Confirm active accounts for New Jersey Gross Income Tax withholding and for unemployment/disability through the Division of Employer Accounts, and check the annual contribution rate notice.
- NJ-W4 on file: Collect a current Form NJ-W4 from each employee, including any wage-chart letter; without one, withhold at Rate A with zero allowances.
- Current rates: Confirm the 2026 UI/WF/SWF, TDI, and FLI worker rates and wage bases are set in the payroll system.
- Reciprocity: Collect Form NJ-165 from Pennsylvania residents so New Jersey income tax is not withheld from their wages.
- Newark payroll tax: If you have Newark payroll, confirm the employer 1% Newark payroll tax is configured; it is an employer tax, not a paycheck deduction.
- New hire reporting: Report each new worker to the New Jersey new hire directory within 20 days.
New Jersey Payroll Quick Facts (2026)
| Income tax | Graduated 1.4% to 10.75% |
| Withholding method | NJ-WT rate tables A–E |
| State withholding form | Form NJ-W4 |
| Default rate table | A (Single/Separate), B (Joint/HoH/Widow) |
| Allowance value | $1,000 each (annual) |
| UI/WF/SWF (employee, 2026) | 0.425% to $44,800 |
| Disability TDI (employee, 2026) | 0.19% to $171,100 |
| Family Leave FLI (employee, 2026) | 0.23% to $171,100 |
| Local wage tax | None (Newark payroll tax is employer-paid) |
| Reciprocity | Pennsylvania only (Form NJ-165) |
| Agencies | Division of Taxation; Dept. of Labor (LWD) |
At LMN Tax Inc, the New Jersey question we field most is the two-earner balance-due. A married couple both check Married/CU Joint on their NJ-W4, both are withheld at Rate B, and because each employer withholds as if that job were the household's only income, their combined withholding lands below their true graduated rate. They file Form NJ-1040 expecting a refund and instead owe, often a few hundred to a couple thousand dollars. The fix is the NJ-W4 wage chart, which points the higher earner to Rate C, D, or E; we run the couple through the chart rather than just adding a flat extra withholding. The second recurring issue is the three contribution lines: workers relocating from a state with no employee disability or family-leave deductions see NJ UI/WF/SWF, NJ DI, and NJ FLI and assume the employer made a mistake. All three are legitimate, all three are capped, and the FLI line in particular funds a benefit the worker can draw on, so we reframe it as insurance rather than a tax. The third is the Pennsylvania commuter: a Pennsylvania resident working in New Jersey who never filed Form NJ-165 has New Jersey tax withheld all year and then has to file a New Jersey nonresident return to get it back, when a single form at hire would have avoided it.
Real-World Example: A New Jersey Biweekly Paycheck
Marcus earns $65,000 per year and works in Edison. He is paid biweekly (26 pay periods), files Single on his W-4, and claims one allowance on his NJ-W4, which puts him on Rate A, with no pre-tax contributions. The federal figure below follows the 2025 Publication 15-T method, and the New Jersey lines use the NJ-WT Rate A table and the 2025 contribution rates.
Gross pay per period: $65,000 / 26 = $2,500.00
| Line | Amount |
|---|---|
| Gross wages | $2,500.00 |
| Federal income tax withholding | −$227.46 |
| Social Security (6.2%) | −$155.00 |
| Medicare (1.45%) | −$36.25 |
| NJ income tax (Rate A, one allowance) | −$86.88 |
| NJ UI/WF/SWF (0.425%) | −$7.08 |
| NJ Disability (TDI, 0.23%) | −$5.75 |
| NJ Family Leave (FLI, 0.33%) | −$8.25 |
| Net pay | $1,973.33 |
The New Jersey income tax line of $86.88 comes from taxable wages of $65,000 − $1,000 = $64,000, which on Rate A is $795 + 6.1% of ($64,000 − $40,000) = $2,259 for the year, divided by 26. The three contribution lines add about $21 per paycheck, money a worker in Texas or Florida would keep. Marcus's employer separately pays its matching Social Security and Medicare, plus the larger employer unemployment and disability contributions. Run your own numbers with the New Jersey paycheck calculator, which applies the rate table after your allowances and shows each contribution line separately.
When New Jersey Withholding Logic Does Not Apply
- Two-earner households on Rate B: The default Rate B assumes one income. If both spouses work, use the NJ-W4 wage chart letter (C, D, or E) that matches combined wages, or the household will owe on Form NJ-1040.
- Pennsylvania residents: A Pennsylvania resident who filed Form NJ-165 has no New Jersey income tax withheld, only Pennsylvania tax, though New Jersey disability and family leave lines can still apply.
- Pre-tax deductions: New Jersey does not exclude 401(k) deferrals from the wage base for TDI, FLI, or UI the way it does for income tax, and Section 125 medical premiums are treated differently again, so the taxable bases can diverge from the federal base.
- Self-employed and 1099 workers: Independent contractors are not subject to New Jersey withholding. They handle New Jersey income tax through estimated payments, similar to the federal process in the self-employment tax guide.
- Private disability plans: Some New Jersey employers use an approved private disability or family leave plan, which can change the employee contribution shown on the stub.
Frequently Asked Questions
If you are a New Jersey employee, use the New Jersey paycheck calculator to see federal withholding, FICA, the graduated state tax, and the UI, disability, and family leave lines for your salary, NJ-W4 status, wage-chart letter, and pay frequency, then confirm the lines on your stub are correct. If you are in a two-earner household and owe every April, complete the NJ-W4 wage chart.
If you are a New Jersey employer, confirm your Division of Taxation withholding and Division of Employer Accounts unemployment/disability accounts and your annual contribution rate notice, verify the 2026 UI/TDI/FLI worker rates and bases are set, collect Form NJ-165 from Pennsylvania residents, then model your full cost-to-hire with the employer payroll tax calculator and review the employer payroll tax obligations guide for federal deposit and filing duties.
- New Jersey Division of Taxation: Tables for Percentage Method of Withholding (NJ-WT Rate Tables A–E)
- Form NJ-W4, Employee's Withholding Allowance Certificate (rate table mapping and wage chart)
- New Jersey Division of Taxation: NJ Income Tax Rates (graduated 1.4% to 10.75%)
- New Jersey Department of Labor, Division of Employer Accounts: Rate information (2026 worker rates UI 0.3825%, DI 0.19%, WF/SWF 0.0425%, FLI 0.23%; bases $44,800 / $171,100)
- IRS Publication 15 (Employer's Tax Guide)
- IRS Topic 751: Social Security and Medicare Withholding Rates