How much is New Jersey state tax on my paycheck?

When you get your first paycheck in New Jersey, it’s normal to wonder, “How much is New Jersey state tax on my paycheck?” Unlike a simple, fixed rate, your take-home pay is affected by a progressive tax system. This means the amount withheld from your paycheck depends on your income, filing status, and other deductions.

This guide is for anyone living or working in New Jersey who wants a clear, straightforward breakdown of their paycheck deductions, from state income tax to other required contributions.

Understanding Your NJ Paycheck: Beyond Just Income Tax

New Jersey uses a progressive income tax system. This means your tax rate increases as your income moves into higher brackets. For the 2025 tax year, rates range from 1.4% to 10.75%.

The exact percentage taken out of your paycheck is calculated using:

• Your Gross Pay: Your total earnings before any deductions.
• Filing Status: Whether you’re single, married filing jointly, etc., as each status has different tax brackets.
• W-4 Information: The exemptions you claim on your NJ-W4 form.

How to Calculate NJ State Tax: A Simple Example

Let’s walk through an example to see how it works.

Example 1: Single Filer

Meet Sarah. She’s a single filer with a gross annual salary of $65,000. She lives and works in New Jersey. Her taxable income is calculated based on the progressive tax brackets for single filers.

• 1.4% on the first $20,000 = $280
• 1.75% on the next $15,000 (up to $35,000) = $262.50
• 3.5% on the next $5,000 (up to $40,000) = $175
• 5.525% on the remaining $25,000 (up to $65,000) = $1,381.25

In this scenario, Sarah’s total estimated annual New Jersey state income tax is $2,093.75. This amount would then be divided by the number of pay periods in a year to determine her per-paycheck withholding.

Example 2: Married Filer

John and Jane are married and filing jointly. Their combined gross annual income is $120,000.

• 1.4% on the first $20,000 = $280
• 1.75% on the next $30,000 (up to $50,000) = $525
• 2.45% on the next $20,000 (up to $70,000) = $490
• 3.5% on the next $10,000 (up to $80,000) = $350
• 5.525% on the remaining $40,000 (up to $120,000) = $2,210

Their total estimated annual New Jersey state income tax is $3,855.

What Other NJ Payroll Deductions Will I See?

Your paycheck includes more than just state income tax. New Jersey mandates contributions to a few key social programs that you might see as deductions.

• Unemployment Insurance (SUI): Employee contributions help fund benefits for those who lose their jobs.
• Temporary Disability Insurance (TDI): This provides partial wage replacement if you’re temporarily out of work due to illness or injury.
• Family Leave Insurance (FLI): This funds paid leave for employees who need to care for a new child or a sick family member.

Get a Precise Number: How to Find Your Take-Home Pay

To get the most accurate picture of your take-home pay, use a trusted online paycheck calculator. You can easily find these on tax and payroll provider websites.

What you’ll need:

• Your gross pay.
• Your pay frequency (e.g., bi-weekly, monthly).
• Your W-4 information, including filing status and allowances.
• Any pre-tax deductions (like 401k or health insurance premiums).

Frequently Asked Questions (FAQs)

Q1: How do I calculate my New Jersey state tax withholding?

Your employer calculates your withholding based on the information you provide on your NJ-W4 form, including your filing status and number of allowances. The more allowances you claim, the less tax is withheld from each paycheck.

Q2: What is the highest income tax rate in New Jersey?

For the 2025 tax year, the highest marginal income tax rate in New Jersey is 10.75%. This rate applies to taxable income over $1,000,000.

Q3: Can I owe more taxes at the end of the year if I claim too many allowances?

Yes. If you claim too many allowances on your NJ-W4, not enough tax will be withheld from each paycheck. This can result in you owing a balance to the state when you file your annual tax return.

Q4: Do New Jersey cities have their own income taxes?

No, New Jersey does not have local income taxes. While some cities have a payroll tax that employers pay, there is no separate income tax for employees at the city or county level.

Q5: What are the biggest factors that impact my take-home pay?

Your take-home pay is most affected by your gross income, your filing status, and mandatory deductions for federal taxes, FICA (Social Security and Medicare), and New Jersey state taxes and contributions.