Updated January 14, 2021
Out of all the states in the US, New Jersey has the highest population density, highest percent urban population, and the densest system of railroads and highways. In the world, New Jersey has the most diners, the most shopping malls in one area, the largest seaport, the longest boardwalk, and the tallest water tower. So for a little guy, New Jersey has a lot going on. The same goes for New Jersey payroll taxes. All the local taxes, withholding requirements, and insurance taxes can get beyond confusing. Fortunately, our New Jersey payroll calculator can simplify the process so you can focus on making your small business the next big thing New Jersey has to offer.
All we need from you is your employees’ wage and W-4 information, and our calculator will do the rest. It will calculate gross pay, net pay, and any deductions for New Jersey and Federal taxes.
Before you can start thinking about New Jersey payroll taxes, you need to first calculate federal payroll taxes. Below is a summary of the steps you need to take in order to run federal payroll, but if you would like to get into the nitty-gritty, check out our step-by-step guide.
New Jersey has a progressive income tax policy with rates that go all the way up to 11.8% for gross income over $5 million. Tax brackets vary based on filing status and income.
Local Taxes: For most of the Garden State, there are no local income taxes. However, Newark residents and any non-residents who work in Newark have to pay an additional city tax of 1%.
Unemployment Insurance (UI): In New Jersey, unemployment taxes are a team effort. Both employers and employees contribute. Rates range from 0.4%-5.4% on the first $36,200 for 2021. If you’re a new employer, you’ll pay a flat rate of 2.68%.
Disability Insurance (DI): New employers pay 0.5%. Employees pay 0.47%. All other businesses are taxed based on employment experience.
Family Leave Insurance (FLI): New Jersey is a family-oriented state, granting insurance if you are bonding with a new baby (biological or adopted) or caring for a sick family member. Employees are responsible for paying this 0.28% tax.
NJ Workforce Development Partnership Fund: 0.0425% for employees and 0.1175% for new employers.
Here are all the details if you want to look further.
Go be the next big, or small, thing. If anything, New Jersey has proven that sometimes the smallest things make the biggest impact. So go write those paychecks and make the impact your small business, whatever it is, was meant to make.
You can also make deposits on an ongoing basis through the EFTPS payment system.
In case that wasn’t enough, here are some more resources for you to learn more about New Jersey payroll taxes:
Register as an employer with the Department of the Treasury | (609) 292-9292
Employer Withholding Information from the Division of Taxation.
New Jersey Income Tax Withholding Instructions | (609) 984-1721