New Jersey Payroll & Paycheck Tax Calculator
Managing payroll in the Garden State shouldn’t feel like navigating the Turnpike at rush hour. From Newark to the Jersey Shore, our New Jersey Payroll Tax Calculator simplifies one of the nation’s most complex payroll systems. Calculate accurate withholdings for state income tax, unemployment insurance, disability benefits, and more—all without breaking a sweat.
New Jersey Payroll Tax Steps
New Jersey’s progressive tax system, multiple insurance programs, and various employer obligations can make payroll feel overwhelming. Our calculator cuts through the complexity, from state withholding to family leave insurance, whether you’re running payroll for one employee or a hundred.
Here are the key steps to make smarter payroll decisions.
Fingercheck and any related entities do not offer tax, accounting, or legal advice. This content is for informational purposes only and should not be considered tax, legal, or accounting advice. Consult your tax, legal, and accounting advisors before undertaking any related activities or transactions.
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How much tax is taken out of a paycheck in New Jersey?
New Jersey paychecks are reduced by federal income tax, Social Security (6.2%), Medicare (1.45%), state income tax (1.40% to 10.75%, based on income), and three New Jersey-specific employee withholdings: unemployment/workforce development (0.425%), temporary disability insurance (0.19%), and family leave insurance (0.23%). Altogether, most workers see roughly 25 to 35% of gross pay withheld, more than in most states, largely because of New Jersey’s added disability and family leave programs.
Because the exact figure depends on income, filing status, and which wage bases apply, use the calculator above for your precise number.
Is overtime pay tax-free in New Jersey now?
No, and this is one of the most misunderstood payroll questions in the state right now. A federal law passed in 2025 (the One Big Beautiful Bill Act) created a temporary federal income tax deduction for qualified overtime pay, up to $12,500 for single filers or $25,000 for joint filers, through 2028. But it’s a deduction claimed on a federal tax return, not a payroll tax exemption, and New Jersey has not adopted it at the state level. Overtime pay stays fully taxable under New Jersey’s regular income tax rates, and Social Security and Medicare still apply to every overtime dollar regardless of the federal deduction.
Starting with 2026 W-2s, employers must separately report qualified overtime pay in Box 12 using code TT, so the deduction can be documented at tax time. Nothing about how you withhold from a paycheck changes because of this law.
New Jersey payroll facts at a glance (2026)
Core New Jersey and federal payroll tax rules for 2026, and who each one affects
New Jersey’s TDI and FLI rates move more than most payroll taxes: the employee TDI rate was $0 in both 2023 and 2024, then rose to 0.23% in 2025 and settled at 0.19% for 2026. Rates like these are set annually and are easy to miss if you’re not checking each January.
Running payroll for a New Jersey business
New Jersey payroll runs several state programs at once. On top of state income tax, employers and employees both contribute to unemployment insurance, and employees also pay into temporary disability insurance (TDI) and family leave insurance (FLI). Rates and wage bases for these programs update every January, so a payroll setup that isn’t refreshed can underwithhold for a full quarter before anyone notices.
Fingercheck calculates New Jersey income tax, unemployment, TDI, and FLI withholding in every payroll run, alongside GPS time tracking, Pay On-Demand, and paperless onboarding for hourly, deskless workforces.
New Jersey’s only income tax reciprocity agreement is with Pennsylvania, so crew members who live in Pennsylvania and file Form NJ-165 don’t have New Jersey income tax withheld. Crew members who live in New York get no such exemption. Fingercheck’s Multi-State Payroll and Same Pay Cycle Tax Calculation, with Tax Reciprocity built in, applies the right withholding for each employee.
