Figuring out your take-home pay in New Jersey isn’t just about looking at your salary number. Between federal income tax, state tax, Social Security, Medicare, and NJ-specific deductions like SDI (State Disability Insurance) and FLI (Family Leave Insurance), the amount that actually lands in your bank account can be very different from your gross pay.
Here’s a step-by-step explanation, with real examples, so you can see exactly how the math works.
What Counts Toward Your Take-Home Pay?
Your paycheck in New Jersey is shaped by several key factors:
- Gross salary or hourly wages
- Federal income tax withholding (based on IRS tax brackets and your W-4 choices)
- New Jersey state income tax
- Payroll taxes: Social Security (6.2%) and Medicare (1.45%)
- State programs: SDI, FLI, and SUI (unemployment insurance)
- Pre-tax contributions like retirement (401k) or health premiums
Think of it as a funnel: you start with your gross salary and subtract each of these categories until you reach your net pay—the money you actually keep.
Example 1: Salary of $70,000 in New Jersey
Let’s break down a $70,000 annual salary for a single filer with no extra deductions, paid biweekly:
| Deduction Type | Annual Amount | Biweekly Amount |
|---|---|---|
| Gross Pay | $70,000 | $2,692 |
| Federal Income Tax (approx.) | –$8,000 | –$308 |
| NJ State Tax | –$2,000 | –$77 |
| Social Security (6.2%) | –$4,340 | –$167 |
| Medicare (1.45%) | –$1,015 | –$39 |
| SDI + FLI + SUI | –$800 | –$31 |
| Net Take-Home Pay | $53,845 | $2,070 |
👉 On a $70K salary, you’d take home about $2,070 every two weeks.
If you add pre-tax retirement contributions (say 5% to a 401k), your net would be lower now, but your taxable income drops—which saves on taxes.
Example 2: Hourly Worker at $20/hour
Now let’s say you earn $20/hour and work 40 hours a week (about $41,600 annually). Here’s a simplified breakdown:
- Gross: $41,600
- Federal withholding: around $4,500
- NJ state tax: about $1,000
- FICA (SS + Medicare): $3,183
- State deductions (SDI/FLI/SUI): $500
Net Pay: about $32,400 per year, or $1,246 biweekly.
Why NJ-Specific Deductions Matter
Many calculators skip over the NJ-specific payroll deductions, but they make a real difference:
- SDI (State Disability Insurance) – helps fund state disability leave
- FLI (Family Leave Insurance) – supports family care leave programs
- SUI (State Unemployment Insurance) – covers state unemployment benefits
Together these usually add up to 1–2% of your paycheck. Small, but noticeable if you’re budgeting closely.
With and Without Retirement Contributions
Let’s compare a $60,000 salary with vs without a 5% 401(k) contribution:
| Scenario | Gross | Pre-Tax Deduction | Taxable Income | Net Take-Home |
|---|---|---|---|---|
| No 401(k) Contribution | $60k | $0 | $60k | ~$46k |
| With 5% 401(k) Contribution | $60k | $3k | $57k | ~$44.5k |
Contributing to retirement lowers your taxable income, but your immediate paycheck shrinks a bit. Long term, it saves on taxes and builds wealth.
Tips for Estimating Your Net Pay
- Always look at per-paycheck amounts, not just annual totals.
- Factor in benefits deductions (health, dental, vision) if your employer covers less.
- Compare across regions in NJ—living costs in Hoboken differ from Camden.
Frequently Asked Questions
1. How much is taken out of a paycheck in New Jersey?
Typically 20–30% of gross pay goes to taxes and deductions, depending on income and benefits.
2. Does New Jersey have local income taxes?
No. NJ only collects state-level taxes; municipalities don’t add income taxes.
3. What are SDI and FLI deductions?
They’re small payroll contributions for state disability and family leave insurance.
4. How do bonuses affect take-home pay in NJ?
Bonuses are taxed at supplemental federal rates plus NJ state tax and standard payroll deductions.
5. Can contractors calculate net pay the same way?
No. Independent contractors pay self-employment tax instead of employer-withheld FICA, so the math differs.
“Use our New Jersey Paycheck Calculator to estimate your take-home pay for 2025.”
“Check the updated 2025 New Jersey Tax Rates before calculating your deductions.”
“Explore the New Jersey Gross-to-Net Paycheck Calculator to see how taxes and deductions affect your income.”
“Learn about New Jersey Payroll Taxes and how they reduce your salary.”
“Understand how NJ-W4 Affects Your Withholding and your final take-home pay.”
“Compare your paycheck by region using the Newark Paycheck Calculator or Trenton Paycheck Calculator.”
Juanita is the creator behind njpaycheckcalculator.org, dedicated to providing accurate and easy-to-use paycheck calculation tools for New Jersey residents. With a strong focus on clarity and reliability, she helps users understand their paychecks and tax deductions with confidence. Juanita is passionate about simplifying complex financial calculations, empowering users to make informed decisions about their income and budgeting.