If you live or work in New Jersey, one of the most common questions is simple:
“How much of my paycheck goes to New Jersey state income tax?”
For 2025, New Jersey’s state income tax rates range from 1.4% to 10.75%, depending on your income and filing status. However, what actually comes out of your paycheck depends on more than just the rate itself.
This article explains how New Jersey’s income tax system works, how employers calculate paycheck withholding, and how to estimate what you’ll take home after state taxes.
New Jersey Income Tax Rates for 2025
New Jersey uses a progressive tax system, which means higher earners pay a higher rate, but only on the portion of income within each bracket.
| Tax Bracket (Single Filers) | Taxable Income Range | Tax Rate |
|---|---|---|
| $0 – $20,000 | 1.4% | |
| $20,001 – $35,000 | 1.75% | |
| $35,001 – $40,000 | 3.5% | |
| $40,001 – $75,000 | 5.525% | |
| $75,001 – $500,000 | 6.37% | |
| $500,001 – $1,000,000 | 8.97% | |
| Over $1,000,000 | 10.75% |
(Source: New Jersey Division of Taxation, 2025 Withholding Tables)
Tip: You only pay the higher rate on income within that bracket, not your entire earnings. Your overall effective tax rate will always be lower.
How New Jersey Calculates Tax on Your Paycheck
When employers process payroll, they use New Jersey’s withholding tables to estimate how much state income tax to deduct from each paycheck.
Your NJ withholding depends on:
- Total annual earnings
- Pay frequency (weekly, biweekly, monthly)
- The NJ-W4 form you submitted
- Allowances and pretax deductions
Example: Biweekly Paycheck
Suppose you earn $75,000 per year and are paid biweekly (26 pay periods).
- Gross pay per check: $2,884.62
- Estimated NJ state tax withheld: $150–$165 per check
- Effective NJ rate: around 5.5%
You can calculate your exact numbers with the biweekly paycheck calculator or the New Jersey gross-to-net paycheck calculator.
Marginal vs. Effective Tax Rate
Many people assume their entire income is taxed at their top rate. In reality, New Jersey taxes income in layers.
If you earn $100,000, your taxes break down as follows:
- 1.4% on the first $20,000
- 1.75% on the next $15,000
- 3.5% on the next $5,000
- 5.525% on the next $35,000
- 6.37% on the remaining $25,000
Your effective rate ends up near 5.5%, not 6.37%.
Think of it as your paycheck tax increasing gradually with income, not all at once.
How Often New Jersey Updates Its Tax Tables
The New Jersey Division of Taxation typically updates its withholding tables each year to account for inflation and policy changes. For 2025, the tax brackets remain the same, but employers are using updated tables for paycheck calculations.
It’s a good idea to review your pay stub at the start of each year to make sure your NJ state withholding aligns with your current income and allowances.
Special Paycheck Scenarios
Bonuses and Supplemental Wages
Bonuses and overtime pay are also subject to New Jersey state income tax. Employers can either combine them with regular wages or withhold separately based on supplemental wage tables.
Nonresidents Working in New Jersey
If you live in another state but work in New Jersey, your income may still be subject to NJ state tax unless a reciprocity agreement applies. Nonresidents file Form NJ-1040NR.
Changing Pay Frequency
Switching from monthly to biweekly pay changes how much is withheld per check, but not your total annual tax.
Example: Paycheck Withholding Breakdown (2025)
| Annual Salary | Pay Frequency | Estimated NJ Tax Per Check | Approx. Effective Rate |
|---|---|---|---|
| $40,000 | Biweekly | $60–$75 | 2.8% |
| $75,000 | Biweekly | $150–$165 | 5.5% |
| $120,000 | Monthly | $580–$620 | 6.0% |
| $250,000 | Biweekly | $650–$720 | 6.7% |
(Estimates only; based on 2025 NJ state income tax rates for single filers.)
To explore how deductions or benefits affect your paycheck, try the New Jersey paycheck deductions calculator.
FAQs About New Jersey Paycheck Taxes
Does New Jersey have local or city income taxes?
No. New Jersey does not have local income taxes — only the state tax applies.
How can I reduce my NJ state tax withholding?
You can update your NJ-W4 form to adjust allowances or contribute more to pretax benefits like retirement plans.
Do remote workers pay NJ income tax?
If your employer is based in New Jersey, you may owe state income tax on wages sourced there, even if you work remotely.
What is the highest New Jersey income tax rate in 2025?
The top rate is 10.75%, which applies to taxable income over $1 million.
Should I check my paycheck tax every year?
Yes. Review your withholding whenever you change jobs, move, or experience a salary adjustment.
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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.