Your Ultimate Guide to New Jersey Payroll

There are various payroll withholding requirements for employers to consider and maintain compliance. These requirements and regulations differ from one US state to another, so it’s important to remain updated on what is needed in the specific states where you hire employees. 

We’ve compiled this basic guide for New Jersey employers, covering some essential payments and payroll withholdings needed in the state, including unemployment insurance, personal income tax, and workers’ compensation. 

Paying unemployment insurance in New Jersey

As with all US states, New Jersey employers must withhold (and pay) mandatory federal taxes such as Medicare and Social Security. In addition to Medicare and Social Security taxes, employers must consider other employer payroll taxes such as unemployment insurance. 

Also known as UI, unemployment insurance is a national program administered by the US Department of Labor to provide temporary financial assistance to eligible employees who involuntarily find themselves without a job. 

Employers are responsible for paying unemployment insurance, which can be managed on New Jersey’s UI online portal. Unlike most other states, New Jersey employers have the option to supplement their unemployment insurance payments with employee contributions. 

New Jersey State unemployment insurance (SUI) tax rates

In New Jersey, the SUI tax rates are determined annually and can be accessed through Employer Access at the end of July each year. These rates are calculated based on the employer's reserve ratio and the Unemployment Trust Fund ratio. Employers have the right to protest their rate determination within 30 days of receiving their notification.

Find out more about paying UI from the New Jersey Department of Labor and Workforce Development. 

Withholding personal income tax from your New Jersey employee

Personal income tax is another payroll withholding payment necessary to remain compliant. The tax on the income of New Jersey residents is also known as individual income tax or state income tax, and it is deducted from the employee’s wages. The employer calculates and withholds this deduction before making payment to the state. 

These payments can be made through New Jersey’s online portal. For more information on paying the withholding amount, you can consult the New Jersey Department of Treasury online.

State withholding tax rates in New Jersey

The withholding tax rates in New Jersey depend on the employee's earnings and the payroll period. Below is a table illustrating the withholding rates for different payroll periods:

Withholding state disability insurance from your New Jersey employee

State Disability Insurance (SDI) Tax provides temporary benefits to workers for non-work-related illness, injury, or pregnancy. Both employer and employee contributions fund SDI through withholdings. 

Employers may participate in the state public insurance program by deducting payroll taxes for employees working in New Jersey or providing employees coverage through a private insurance plan that meets New Jersey’s requirements.

If you decide to purchase disability insurance through the state, you can register and manage your insurance through New Jersey’s online portal. For more information on New Jersey’s state disability insurance, the Department of Labor and Workforce Development provides valuable information.

Paying your New Jersey workers’ compensation

When an employer hires a single individual from New Jersey (or more), they are liable to pay for workers’ compensation. Workers’ compensation is insurance that covers the financial implications of an employee being injured while performing their job, relieving the pressure from both employer and employee. 

Take note that workers’ compensation differs from state disability insurance, a payment reserved for workers for non-work-related illness or injury. 

In most instances, workers’ compensation is purchased from a qualified commercial carrier in the state. The New Jersey Department of Workforce and Labor Management provides more information on finding a qualified commercial carrier. 

It’s important to verify that your workers’ compensation insurance complies with the state’s regulations for workers’ compensation.

Workers' compensation tax rates in New Jersey

Workers' compensation in New Jersey for 2024 includes the following rates:

Understanding these details ensures that your business not only complies with New Jersey's payroll tax laws but also effectively manages its payroll obligations.

Payroll tax due dates in New Jersey

The due dates for payroll taxes are determined by the type of tax and the frequency of payroll. It's crucial for employers to adhere to these deadlines to ensure compliance and avoid penalties. Here’s a more detailed look at the payroll tax due dates in New Jersey:

Weekly payroll tax due dates

For employers who process payroll weekly, the state requires that taxes be submitted shortly after the payroll period ends. Below is a table that outlines the due dates for each week of the year:

Monthly and quarterly payroll tax due dates

For those who process payroll on a monthly or quarterly basis, the due dates are typically at the end of the month following the reporting period. Here are the general guidelines:

• Monthly payroll taxes: Due by the 10th day of the month following the payroll month. For example, taxes for wages paid in January are due by February 10th
• Quarterly payroll taxes: Due by the last day of the month following the end of the quarter.

Here’s a breakdown:

• Q1 (January - March): Due by April 30
• Q2 (April - June): Due by July 31
• Q3 (July - September): Due by October 31
• Q4 (October - December): Due by January 31

Annual reconciliation

In addition to regular payroll tax submissions, New Jersey requires an annual reconciliation of the taxes withheld throughout the year. This is typically due by February 15th of the following year.

Special considerations

It’s important to note that if a due date falls on a weekend or a public holiday, the deadline is extended to the next business day. Employers should also be aware of any changes to tax rates or filing procedures announced by the New Jersey Division of Taxation, which could affect the filing deadlines.

Submission process for payroll taxes in New Jersey

Employers in New Jersey are required to file various forms such as NJ-927 and WR-30 electronically. The state mandates the use of online services for filing, and for bulk e-filing of 100 or more documents, the Axway service is utilized. This ensures a streamlined process and helps maintain accurate records.

Withholding paid family leave from your New Jersey employee

Paid family leave (PFL) is another employer payroll tax to withhold from employees' wages. PFL is state insurance that provides cash benefits to employees who cannot work because they need to care for a family member. 

These circumstances include caring for family members with physical or mental health conditions, bonding with a newborn or newly adopted or foster child, or handling certain domestic or sexual violence issues. 

Similar to personal income tax, PFL is funded by employee contributions through employer withholdings. These payments are withheld and paid through an online portal. The New Jersey Department of Labor and Workforce Management provides more information on PFL and employer responsibilities.

Simplify US payroll tax compliance with Deel

The information provided in this guide provides a great introduction to New Jersey payroll taxes, payroll compliance, and state requirements. However, there are other processes and compliance considerations beyond what is mentioned. To streamline the process and ensure full compliance, companies can turn to Deel’s robust and centralized system.

Deel offers a comprehensive solution for managing US and international payroll, including payments, taxes, worker classification, and more. Are you ready to get started? Request a demo with Deel today.