Running payroll in New Jersey involves more than paying wages — employers must also handle several state and federal payroll taxes. Understanding these obligations helps you budget labor costs accurately and stay compliant with tax authorities.
This guide explains what payroll taxes New Jersey employers pay, how each one works, and what to expect for 2025.
New Jersey Employer Payroll Taxes
Every employer in New Jersey must withhold and pay the following main payroll taxes:
| Tax Type | Who Pays | Purpose | Rate / Wage Base (2025) |
|---|---|---|---|
| State Income Tax Withholding | Employee (employer withholds) | Funds NJ income tax revenue | 1.4% – 10.75% (progressive) |
| State Unemployment Insurance (SUI) | Employer | Provides unemployment benefits | Wage base ≈ $43,300 ; rate varies (0.5%–5.8%) |
| Temporary Disability Insurance (TDI) | Employer + Employee | Supports short-term disability leave | Employer rate ≈ 0.10%–0.75% of wages |
| Family Leave Insurance (FLI) | Employee (employer remits) | Paid family & medical leave | Employee rate ≈ 0.09% ; wage base ≈ $170,000 |
| Federal Payroll Taxes (FICA/FUTA) | Employer + Employee | Social Security, Medicare, unemployment | FICA = 7.65% split; FUTA = 0.6% on $7,000 |
| Local Payroll Taxes | Employer (select cities) | City-level programs (e.g., Newark, Jersey City) | 1% of gross wages (employer-only) |
(Sources: NJ Division of Taxation & DOL Wage and Hour Division)
State Income Tax Withholding
Employers act as agents for the New Jersey Division of Taxation by withholding state income tax from employee wages.
- Rates: Progressive (1.4% to 10.75%) depending on income and filing status.
- Forms: Employees complete Form NJ-W4 to set allowances.
- Remittance: Employers deposit withheld taxes weekly, monthly, or quarterly based on payroll size.
For quick estimates, you can use the New Jersey payroll tax calculator to see how much income tax is withheld each pay period.
State Unemployment Insurance (SUI)
All NJ employers fund the State Unemployment Insurance program through quarterly contributions.
- Who pays: Employers only.
- 2025 wage base: Approximately $43,300 per employee.
- Rate: Varies by employer experience (typically 0.5% – 5.8%).
- Purpose: Provides benefits to workers who lose jobs through no fault of their own.
Employers with a stable history of timely filings and low layoffs often qualify for lower SUI rates.
Temporary Disability and Family Leave Insurance (TDI & FLI)
These programs provide partial wage replacement when an employee cannot work due to illness or caregiving.
Temporary Disability Insurance (TDI)
- Shared between employer and employee.
- Employer rate varies yearly (≈ 0.10%–0.75%).
Family Leave Insurance (FLI)
- Fully employee-funded in most cases.
- Rate ≈ 0.09% on wages up to $170,000 (2025).
- Employers must withhold and remit payments.
Employers should verify the latest wage base each January since these change annually.
Federal Payroll Taxes (FICA & FUTA)
In addition to state taxes, every employer must also pay:
- Social Security (6.2%) and Medicare (1.45%) on wages up to federal limits.
- Federal Unemployment (FUTA) – 0.6% of the first $7,000 in wages per employee (after state credits).
Employers match the employee’s FICA contribution dollar for dollar.
Local Payroll Taxes (Newark and Jersey City)
Certain NJ municipalities impose local payroll taxes:
- Newark Employer Payroll Tax: 1% of gross wages for employees working in the city.
- Jersey City Payroll Tax: 1% of gross wages; applies to employers with non-resident workers.
Always check city ordinances if your business operates within these jurisdictions.
Example: Total Employer Payroll Cost in New Jersey
Let’s say you employ one full-time worker earning $60,000 per year.
Here’s a simplified employer payroll tax estimate:
| Tax Type | Estimated Employer Cost |
|---|---|
| SUI (2.5% on $43,300) | $1,082.50 |
| TDI (0.5%) | $300 |
| FICA (7.65%) | $4,590 |
| FUTA (0.6%) | $42 |
| Local (if Newark) | $600 |
| Total Employer Tax Cost | ≈ $6,600 (11% of wages) |
This does not include employee-withheld income tax or benefits.
You can run more detailed projections with the New Jersey salary paycheck calculator to understand total payroll expense per employee.
Filing & Compliance for NJ Employers
- Register via NJ REG before paying wages.
- Withhold and remit taxes through the NJ Division of Taxation online portal.
- File quarterly reports: WR-30 (wages) & NJ-927 (withholding).
- Annual forms: W-2 (employees) & W-3 (summary).
Late payments can lead to fines and loss of “good standing” with the Division of Taxation, so track your payroll deadlines carefully.
Common Questions About NJ Employer Payroll Taxes
1. What payroll taxes are employers required to pay in New Jersey?
State unemployment insurance, disability insurance, federal payroll taxes, and sometimes local payroll tax.
2. Do New Jersey employers pay state income tax?
Employers don’t pay state income tax themselves but must withhold and remit it for employees.
3. Are local payroll taxes mandatory statewide?
No — only specific municipalities such as Newark and Jersey City levy employer payroll taxes.
4. How do remote workers affect NJ payroll taxes?
If an employee performs work in New Jersey, even remotely, those wages are generally subject to NJ payroll taxes.
5. When are employer payroll taxes due in NJ?
Most are due quarterly; withholding deposits depend on total liability (weekly, monthly, or quarterly).
“Use the New Jersey Payroll Tax Calculator to understand both employer and employee tax responsibilities.”
“Learn about New Jersey Unemployment Insurance Tax and how it impacts employer costs.”
“Find out how New Jersey Family Leave Insurance Tax applies to both employees and employers.”
“Understand New Jersey SDI Tax and how it contributes to disability coverage.”
“Check your total contribution obligations with the New Jersey FICA Calculator.”
“Get a full overview of New Jersey Payroll Deductions to manage compliance and accuracy.”
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.