What taxes are taken out of a New Jersey paycheck?

What Taxes Are Taken Out of a New Jersey Paycheck? Your Guide to NJ Payroll Deductions

If you live and work in New Jersey, looking at your pay stub can be a little surprising compared to other states. That’s because the “Garden State” has a unique set of employee-funded programs that are a crucial part of your paycheck deductions. Understanding where your money goes is the first step to smart financial management.

This guide is for anyone asking, “How do I calculate my take-home pay in New Jersey?” or “Why are there so many deductions on my NJ pay stub?” We’ll break down every type of tax and deduction you’ll see.

Federal Taxes: The Standard U.S. Payroll Deductions

Every employee in the United States, including those in New Jersey, contributes to these federal programs. Your employer is required to withhold these amounts based on your W-4 form.

• Federal Income Tax: This is a progressive tax. The more you earn, the higher your tax rate. The amount withheld is an estimate of your annual tax liability, based on your filing status (Single, Married, etc.) and other information you provided on your W-4.
• FICA Taxes (Social Security & Medicare): FICA stands for the Federal Insurance Contributions Act. These taxes fund Social Security and Medicare benefits for retirees, disabled individuals, and others.
  • Social Security Tax: The employee share is 6.2% of your wages, up to the annual wage base limit. For 2025, that limit is $176,100. Any income earned above this amount is not subject to Social Security tax.
  • Medicare Tax: The employee share is 1.45% of all your wages, with no income limit. If you earn over a certain threshold ($200,000 for single filers), an additional 0.9% Medicare tax is applied to your earnings above that amount.

New Jersey State Taxes: What Makes Your Paycheck Unique

New Jersey is one of the few states where employees directly contribute to several state-run insurance programs. This means your paycheck will have more deductions than a worker in, say, Florida or Texas.

• New Jersey State Income Tax: The state uses a progressive tax system with rates ranging from 1.4% to 10.75%. The exact rate depends on your income level and filing status.
• New Jersey Unemployment Insurance (SUI): While employers pay the bulk of this tax, New Jersey employees also contribute a small amount to the state’s unemployment fund. This provides a safety net for workers who become unemployed.
• New Jersey Temporary Disability Insurance (TDI): This mandatory deduction provides partial wage replacement if you are temporarily unable to work due to a non-work-related injury or illness.
• New Jersey Family Leave Insurance (FLI): This deduction funds the state’s paid family leave program. It allows you to take paid time off to bond with a new child or care for a seriously ill family member. In 2025, the employee contribution rate for FLI is 0.33% on wages up to a certain maximum.

Real-Life Example: Calculating Your NJ Take-Home Pay

Let’s walk through a simple example for a single employee in New Jersey earning a bi-weekly salary.

Example 1: A bi-weekly paycheck for a single employee earning $45,000 annually ($1,730.77 gross bi-weekly pay).

Deduction Type	Amount	Calculation
Federal Income Tax	-$140.00	Approximate based on W-4
Social Security	-$107.31	6.2% of $1,730.77
Medicare	-$25.09	1.45% of $1,730.77
NJ State Income Tax	-$45.00	Approximate based on income and filing status
NJ Unemployment Insurance (SUI)	-$5.10	Approximate rate of 0.295%
NJ Temporary Disability Insurance (TDI)	-$3.98	Approximate rate of 0.23%
NJ Family Leave Insurance (FLI)	-$5.71	Approximate rate of 0.33%
Total Deductions	-$337.19
Net Pay (Take-Home)	$1,393.58	$1,730.77 – $337.19

This example shows how all the different taxes work together to reduce your gross pay to your final take-home amount.

Frequently Asked Questions (FAQs)

Q1. How can I calculate my New Jersey paycheck with all these deductions?

A: To get a precise calculation, use a reliable online paycheck calculator. These tools ask for your salary, filing status, and allowances to give you an accurate estimate of your net pay after accounting for all federal and state taxes.

Q2. Are there any local taxes taken out of a New Jersey paycheck?

A: No, New Jersey does not have a local income tax for employees. Some cities, like Newark, have a payroll tax, but this is paid by the employer, not the employee.

Q3. Why do I pay both federal and New Jersey state taxes?

A: Federal taxes fund nationwide programs like Social Security and Medicare, while state taxes fund state-level services and benefits, such as road maintenance, public education, and state-specific disability and family leave programs.

Q4. Can I change how much tax is withheld from my paycheck?

A: You can adjust your federal income tax withholding by submitting a new W-4 form to your employer. This is useful if you want to withhold more or less money throughout the year to manage your tax refund.

Q5. Why is my paycheck deduction for NJ Family Leave Insurance so high?

A: The employee contribution rate for Family Leave Insurance (FLI) has increased in recent years to strengthen the program and its benefits. It is a mandatory deduction, but it provides valuable paid leave benefits for major life events.