Quick Answer
New Jersey is one of the most complex payroll states in the country. Employers must manage SUI (0.4%–5.4% employer + 0.425% employee on $42,300), FLI (0.09% employee), TDI (0.14% employee), graduated state income tax (1.4%–10.75%), and a minimum wage of $16.34/hr in 2026. The $42,300 SUI wage base is one of the highest in the nation. Final paychecks are due by the next regular payday.
Table of Contents
- New Jersey Payroll Obligations at a Glance
- State Unemployment Insurance (SUI)
- Temporary Disability Insurance (TDI)
- Family Leave Insurance (FLI)
- State Income Tax: Graduated Rates
- Withholding and Form NJ-W4
- Minimum Wage 2026
- Overtime Rules
- Pay Frequency and Final Paycheck
- New Hire Reporting
- Employer Registration
- Filing Schedules and Deadlines
- Federal Payroll Taxes
- Frequently Asked Questions
New Jersey consistently ranks among the most complex — and most expensive — payroll states for employers. The combination of a massive SUI wage base ($42,300, among the highest in the country), separate employee contributions for both unemployment insurance, temporary disability insurance, and family leave insurance, a graduated state income tax with rates up to 10.75%, and one of the nation's highest minimum wages creates a compliance burden that demands careful attention. This guide covers every New Jersey payroll obligation for employers in 2026.
New Jersey Payroll Obligations at a Glance
| Tax / Obligation | Who Pays | Rate (2026) | Wage Base |
|---|---|---|---|
| SUI (Employer) | Employer | 0.4%–5.4% (new: 2.8%) | $42,300 |
| SUI (Employee) | Employee (employer withholds) | 0.425% | $42,300 |
| Workforce Development | Employer | 0.1175% | $42,300 |
| TDI (Employee) | Employee (employer withholds) | 0.14% | $42,300 |
| FLI (Family Leave Insurance) | Employee (employer withholds) | 0.09% | $42,300 |
| State IT Withholding | Employee (employer withholds) | 1.4%–10.75% graduated | No cap |
Note: New Jersey employers may also have TDI employer contributions depending on their plan type (state or private plan). Private plan TDI employers may have different cost structures.
State Unemployment Insurance (SUI)
New Jersey's unemployment insurance is administered by the New Jersey Department of Labor and Workforce Development (NJDOL). Unlike most states, New Jersey requires both employer and employee contributions to SUI, creating two separate withholding obligations on the same $42,300 wage base.
SUI Rates for 2026
- Employer rate range: 0.4% to 5.4%
- New employer rate: 2.8% (for employers in the first year)
- Employee rate: 0.425% (withheld by employer)
- Taxable wage base: $42,300 per employee per calendar year
- Maximum annual employer SUI cost per employee: $2,284.20 (at 5.4%)
- Maximum annual employee SUI cost per employee: $179.78 (at 0.425%)
The $42,300 Wage Base: What It Means for Your Budget
New Jersey's SUI wage base of $42,300 is more than 6 times the federal FUTA wage base of $7,000, and nearly 5 times the California SUI wage base of $7,000. For a growing company adding 10 employees at the new employer rate of 2.8%, the annual SUI employer cost alone is $11,844 ($42,300 × 2.8% × 10) — before the employee SUI withholding, TDI, or FLI. Factor this into your hiring cost models when expanding into New Jersey.
Workforce Development Assessment
In addition to SUI, New Jersey employers pay a Workforce Development Partnership Fund (WDP) assessment of approximately 0.1175% on the same $42,300 wage base. This is an employer-paid assessment separate from the SUI rate. New Jersey also has a Supplemental Workforce Fund (SWF) assessment. Both assessments are reported and paid together with SUI through the NJ Division of Revenue.
FUTA and New Jersey SUI
New Jersey employers who pay state SUI on time qualify for the standard 5.4% FUTA credit, reducing the effective federal FUTA rate to 0.6%. New Jersey has generally maintained a solvent UI trust fund. Verify current trust fund status annually.
Temporary Disability Insurance (TDI)
New Jersey's Temporary Disability Insurance (TDI) provides partial wage replacement to employees who cannot work due to non-work-related illness, injury, or pregnancy. TDI is a mandatory benefit in New Jersey — all employers must provide TDI coverage for eligible employees.
TDI Employee Contribution (2026)
- Employee rate: 0.14% of gross wages (withheld by employer)
- Wage base: $42,300 per employee per year
- Maximum annual employee TDI contribution: $59.22
State Plan vs. Private Plan TDI
New Jersey employers have two options for providing TDI coverage:
- State Plan: Participate in the New Jersey state TDI program administered by NJDOL. Employee contributions are withheld and remitted to the state along with SUI and other contributions.
- Private Plan (Approved): Purchase TDI coverage from an approved private insurer. The private plan must provide benefits at least equal to the state plan. With an approved private plan, you remit employee TDI contributions to the private insurer rather than the state. Your private plan TDI costs may differ from the state rate.
Employers who choose a private plan must apply to NJDOL for approval. Private plans are common among larger New Jersey employers who can negotiate favorable group rates.
TDI Benefits
TDI pays approximately 85% of average weekly wages, up to a weekly maximum that is updated annually. Benefits typically begin after a 7-day waiting period (except for pregnancy-related conditions in some cases) and can continue for up to 26 weeks. The disability must be non-work-related; work-related injuries are covered by workers' compensation.
Family Leave Insurance (FLI)
New Jersey's Family Leave Insurance (FLI) program is part of the New Jersey FLI Act and is funded entirely by employee contributions. It provides paid leave for employees who need time off to bond with a new child or care for a seriously ill family member.
FLI Rate and Wage Base
- Employee rate: 0.09% of gross wages (withheld by employer)
- Wage base: $42,300 per employee per year (same as SUI and TDI)
- Maximum annual employee FLI contribution: $38.07
FLI Benefits
FLI provides up to 12 weeks of paid family leave per year at approximately 85% of average weekly wages (up to a maximum). Qualifying reasons for FLI include:
- Bonding with a newborn, newly adopted, or newly placed foster child
- Caring for a family member with a serious health condition
- Certain needs related to domestic or sexual violence
FLI vs. TDI vs. FMLA: How They Interact
New Jersey's FLI, TDI, and federal FMLA can overlap and interact. TDI covers the employee's own disability; FLI covers family caregiving and bonding. FMLA provides unpaid, job-protected leave for qualifying events. An employee recovering from childbirth may use TDI for their own disability period, then FLI for the bonding period. FMLA can run concurrently with both. New Jersey also has its own New Jersey Family Leave Act (NJFLA), which provides unpaid leave for certain employers not covered by federal FMLA. Managing these overlapping leave laws is one of the most complex HR challenges for New Jersey employers.
State Income Tax: New Jersey's Graduated Rates
New Jersey uses a graduated state income tax with rates ranging from 1.4% to 10.75%. The 10.75% top rate applies to income over $1 million and was permanently enacted. New Jersey's income tax brackets in 2026:
| Taxable Income (Single) | 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% |
Married filing jointly brackets differ from single filer brackets. New Jersey withholding is calculated based on the employee's NJ-W4 using the official NJ withholding tables published by the New Jersey Division of Taxation.
Withholding and Form NJ-W4
New Jersey's employee withholding form is Form NJ-W4. New employees must complete an NJ-W4 before their first paycheck. The form captures:
- Filing status
- Number of allowances
- Additional withholding, if requested
If an employee does not submit an NJ-W4, withhold at the rate for "single" or "married filing separately" with zero allowances — the maximum withholding position. New Jersey does not fully conform to the 2020 federal W-4 redesign; the NJ-W4 retains the allowance-based system.
New Jersey Income Tax Withholding Tables
New Jersey's withholding tables are published annually by the NJ Division of Taxation. Because NJ uses a graduated rate with multiple brackets, the tables vary by pay frequency and filing status. Most payroll software is configured to calculate NJ withholding automatically. Employers calculating manually should always use the most current year's tables from njtaxation.org.
Minimum Wage in New Jersey 2026
New Jersey's minimum wage is one of the highest in the United States. Under the Diane B. Allen Equal Pay Act and New Jersey's minimum wage statute, the minimum wage is indexed to CPI and increases annually.
- General minimum wage (2026): $16.34 per hour
- Tipped employees: Minimum $5.62 per hour cash wage, provided tips bring total compensation to at least $16.34/hr
- Small employers (5 or fewer employees): $14.53 per hour (separate schedule through January 1, 2028, when it reaches the general rate)
- Seasonal and agricultural workers: Subject to separate schedules; verify with NJDOL
Small Employer Definition Matters
New Jersey's "small employer" minimum wage exemption (the lower schedule) applies to employers with 5 or fewer employees. If you cross from 5 to 6 employees at any point during the year, you may need to increase wages to the general rate for all employees, not just the new hire. Track your headcount carefully. Once the small employer schedule converges with the general rate on January 1, 2028, the distinction disappears.
Tipped Employees and Tip Credit
New Jersey allows a tip credit for tipped employees but it has become increasingly limited as the minimum wage has risen. The cash wage floor is currently $5.62/hr for tipped employees, with the employer relying on tips to bring the effective rate to $16.34/hr. If tips in any workweek are insufficient, the employer makes up the difference. The NJ Department of Labor monitors tip credit compliance and requires detailed recordkeeping.
Overtime Rules
New Jersey follows the federal FLSA for overtime requirements. Non-exempt employees must be paid at 1.5 times the regular rate for all hours over 40 in a workweek. New Jersey's Wage and Hour Law mirrors federal overtime provisions and does not go beyond the federal standard for most employees.
One notable New Jersey addition is the Construction Industry Independent Contractor Act, which establishes a strong presumption that construction workers are employees, not independent contractors. Misclassification in construction is aggressively enforced and can result in retroactive payroll tax liability, penalties, and interest on all wages that should have been processed through payroll.
Pay Frequency and Final Paycheck Rules
Pay Frequency
New Jersey requires employers to pay wages at least twice per month (semi-monthly) for most employees. Managerial, supervisory, or executive employees may be paid monthly by agreement. Employers may pay more frequently without restriction.
Final Paycheck Rule
New Jersey requires that a departing employee's final wages be paid no later than the next regular payday following the last day of work. This applies to both voluntary resignations and involuntary discharges. New Jersey does not require same-day or next-day payment, but all earned wages (including accrued vacation if the employer's policy provides for payout) must be included.
New Jersey WARN Act for Mass Layoffs
If you are planning a mass layoff or plant closing in New Jersey, the New Jersey WARN Act requires advance notice of up to 90 days to affected employees and state officials. Failure to provide the required notice triggers severance pay obligations. New Jersey's WARN Act has broader coverage than the federal WARN Act and applies to smaller employers. If you are planning a significant workforce reduction, consult a New Jersey employment attorney well in advance.
New Hire Reporting
New Jersey employers must report all new hires and rehires to the New Jersey New Hire Reporting Center within 20 days of the employee's first day of work. Reports can be submitted online at state.nj.us/treasury/revenue/newhire or through the federal multistate portal for multistate employers. Required information includes employee name, address, Social Security number, date of hire, and employer EIN.
Employer Registration in New Jersey
Before running your first New Jersey payroll, you must register with multiple agencies. New Jersey uses a centralized registration system that can simplify this:
New Jersey Division of Revenue — Employer Registration
Register at njportal.com/DOR/BusinessRegistration. This registration covers your NJ employer withholding account, SUI account, TDI, and FLI all under one registration application. You receive a New Jersey Employer Identification Number (NJ EIN) that covers all state payroll tax accounts. This unified registration is one of New Jersey's few payroll simplifications.
Workers' Compensation
New Jersey requires workers' compensation insurance for all employers. Obtain a policy from an approved carrier or through the New Jersey Compensation Rating and Inspection Bureau (CRIB). Register your policy with the New Jersey Division of Workers' Compensation.
Filing Schedules and Deadlines
NJ Form NJ-927 — Employer Quarterly Report
The NJ-927 is New Jersey's employer quarterly payroll tax report. It covers all NJ payroll taxes: employer SUI, employee SUI, TDI, FLI, and state income tax withholding. All taxes are reported on a single quarterly form — a meaningful convenience given the number of separate rates involved.
| Quarter | Period | Due Date |
|---|---|---|
| Q1 | Jan 1 – Mar 31 | April 30 |
| Q2 | Apr 1 – Jun 30 | July 31 |
| Q3 | Jul 1 – Sep 30 | October 31 |
| Q4 | Oct 1 – Dec 31 | January 31 |
Monthly Withholding Deposits
New Jersey income tax withholding may need to be deposited monthly (by the 15th of the following month) or more frequently, depending on withholding volume, separate from the quarterly NJ-927 filing. The NJ Division of Taxation assigns your deposit frequency based on your withholding total during a lookback period.
NJ-W3 Annual Reconciliation
New Jersey employers file the NJ-W3 (Annual Reconciliation of Gross Income Tax) along with W-2s by February 15 each year (note: New Jersey's annual filing deadline is February 15, not January 31 like most states). Electronic filing is required for employers with 25 or more W-2s.
W-2 Requirements
W-2s must reflect New Jersey state income tax withholding in Box 17 (state income tax), employer SUI contributions are not on W-2s, but TDI and FLI contributions paid by the employee are reported in Box 14 as "NJDI" and "NJFLI" respectively. Employees often have questions about these Box 14 entries at tax time — they are informational and relate to potential NJ income tax deductions for the employee.
Federal Payroll Taxes
New Jersey payroll taxes are in addition to substantial federal obligations:
- Social Security (OASDI): 6.2% employer + 6.2% employee on wages up to $176,100 (2026)
- Medicare: 1.45% employer + 1.45% employee on all wages (0.9% Additional Medicare Tax on employee wages over $200,000)
- FUTA: 6.0% on first $7,000, reduced to 0.6% with the full NJ SUI credit
- Federal income tax withholding: Based on the employee's W-4
- Form 941: Quarterly federal payroll tax return, due April 30, July 31, October 31, January 31
For a New Jersey employee earning $50,000/year, the combined employer payroll cost (federal + state, employer-paid taxes only) can easily reach $7,000–$8,000 per year before the employee's wages — one of the highest total employer burdens in the country.
Frequently Asked Questions
What is New Jersey's SUI wage base in 2026?
New Jersey's SUI taxable wage base is $42,300 per employee — one of the highest in the country. Both employer SUI and employee SUI contributions apply on wages up to this amount. TDI and FLI employee contributions use the same wage base.
What is New Jersey's FLI rate in 2026?
The FLI employee contribution rate is 0.09% on the first $42,300 of wages. This is withheld by the employer and remitted through the standard NJ payroll tax returns. FLI provides up to 12 weeks of paid leave for bonding or family caregiving.
What is New Jersey's TDI rate in 2026?
The TDI employee contribution rate is 0.14% on the first $42,300 of wages. Employers using the state plan remit these contributions to NJDOL. Employers using an approved private plan remit to the private insurer. Employer TDI contributions depend on plan type.
What is New Jersey's minimum wage in 2026?
The general minimum wage is $16.34 per hour. Small employers (5 or fewer employees) and seasonal employers have a lower schedule. Tipped employees must receive at least $5.62/hr in direct wages. New Jersey's minimum wage adjusts annually based on CPI.
What is New Jersey's state income tax rate?
New Jersey's income tax is graduated from 1.4% to 10.75%. Most employees with typical wages will face effective rates in the 5.525%–6.37% range. The 10.75% top rate applies only to income over $1 million.
When must New Jersey employers issue a final paycheck?
By the next regular payday following the last day of work. New Jersey does not require same-day or next-day final pay. However, all earned wages and accrued vacation (if your policy requires payout) must be included.
Simplify New Jersey Payroll
New Jersey's combined SUI, TDI, FLI, and graduated income tax make it one of the hardest payroll states to manage manually. Gusto handles all NJ payroll tax filings, withholding calculations, and year-end W-2s automatically. Trusted by businesses across New Jersey.
Legal & Tax Disclaimer
This article is for general informational purposes only and does not constitute legal, tax, or professional advice. Employment laws, tax regulations, and compliance requirements change frequently. The information on this page reflects our understanding as of the date noted above and may not reflect recent changes in federal or New Jersey state law.
Do not act or refrain from acting based solely on the information in this article. Always consult a qualified attorney, CPA, or HR professional familiar with New Jersey law before making payroll or compliance decisions for your business.