New Jersey Salary Calculator - Free NJ Paycheck & Tax Estimator for 2024
Estimated reading time: 19 minutes. This guide covers New Jersey's 2024 state tax brackets (1.4%-10.75%), federal withholding, FICA, NJ-specific payroll taxes, and step-by-step paycheck calculations.
NJ Salary Calculator Tool
Use this free calculator to estimate your New Jersey take-home pay. Enter your annual salary, filing status, and other details to see a detailed breakdown of federal taxes, NJ state taxes, FICA, and NJ-specific payroll deductions. The calculator uses the latest 2024 NJ tax brackets with rates ranging from 1.4% to 10.75%.
Your New Jersey Paycheck Breakdown
Understanding New Jersey Income Taxes
New Jersey imposes one of the steepest progressive income tax systems in the United States. With rates spanning from 1.4% on the first dollars of taxable income up to 10.75% on income exceeding one million dollars, the Garden State consistently ranks among the top five highest-taxing states for high earners. This progressive structure means that while lower-income and middle-income residents face relatively modest state tax rates, upper-income earners shoulder a significantly heavier burden.
The NJ income tax system operates with seven distinct brackets for single filers. Unlike the federal system, New Jersey does not offer a standard deduction. Instead, the state provides personal exemptions of $1,000 per filer (plus $1,500 per dependent), which are subtracted from gross income to arrive at taxable income. This means almost all of your income is subject to state tax from the first dollar, though at the low initial rate of 1.4%.
New Jersey's tax structure reflects the state's high cost of living and the revenue needs of a densely populated state with significant infrastructure and public service costs. The top bracket of 10.75% was established in 2020 as a "millionaire's tax" on income above $1 million, replacing the previous top rate of 8.97% that applied above $500,000. This change significantly increased the tax burden for the state's highest earners.
One advantage of New Jersey's tax system is the absence of local income taxes. Unlike nearby states such as Pennsylvania and Ohio, where cities and municipalities can levy their own income taxes, all income taxation in New Jersey occurs at the state level. This simplifies compliance for workers and employers, though it means the state rates are necessarily higher to compensate for the lack of local tax revenue.
The NJ Division of Taxation administers the state income tax system and provides guidance on filing requirements, rate tables, and available credits and deductions. Employers in New Jersey are required to withhold state taxes based on the NJ-W4 form completed by employees, along with several NJ-specific payroll taxes that fund unemployment insurance, disability insurance, and family leave insurance programs.
NJ 2024 Tax Brackets in Detail
The New Jersey income tax brackets for 2024 apply to taxable income after personal exemptions. Here are the brackets for single filers and married couples filing jointly:
Single, Married Filing Separately, Head of Household
| Taxable Income Range | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 - $20,000 | 1.4% | Up to $280 |
| $20,001 - $35,000 | 1.75% | Up to $262.50 |
| $35,001 - $40,000 | 3.5% | Up to $175 |
| $40,001 - $75,000 | 5.525% | Up to $1,933.75 |
| $75,001 - $500,000 | 6.37% | Up to $27,072.50 |
| $500,001 - $1,000,000 | 8.97% | Up to $44,850 |
| $1,000,001+ | 10.75% | Varies |
Married Filing Jointly
| Taxable Income Range | Tax Rate | Tax on Bracket |
|---|---|---|
| $0 - $20,000 | 1.4% | Up to $280 |
| $20,001 - $50,000 | 1.75% | Up to $525 |
| $50,001 - $70,000 | 2.45% | Up to $490 |
| $70,001 - $80,000 | 3.5% | Up to $350 |
| $80,001 - $150,000 | 5.525% | Up to $3,867.50 |
| $150,001 - $500,000 | 6.37% | Up to $22,295 |
| $500,001 - $1,000,000 | 8.97% | Up to $44,850 |
| $1,000,001+ | 10.75% | Varies |
The jump from 5.525% to 6.37% at $75,000 (single) or $150,000 (married) is where many middle-class New Jersey workers feel the impact of the state's progressive system. For a single filer earning $85,000, the NJ state tax would be approximately $3,289, representing an effective state rate of about 3.87%. By contrast, a single filer earning $500,000 would pay approximately $29,724 in NJ state tax, an effective rate of roughly 5.94%.
The "millionaire's tax" bracket at 10.75% applies only to income above $1 million. This means someone earning exactly $1 million pays the same rates as everyone else through the lower brackets and only hits the 10.75% rate on the next dollar. The total NJ state tax on $1 million of taxable income (single) is approximately $74,574, for an effective rate of about 7.46%. Each dollar above $1 million is taxed at 10.75 cents, making the marginal burden on very high earners quite significant.
NJ Payroll Taxes Beyond FICA
New Jersey is unique in having several state-specific payroll taxes that are deducted from employee paychecks in addition to federal FICA taxes. These programs fund state insurance and workforce development initiatives. While each individual tax is small, they add up and should be factored into your take-home pay calculation.
State Disability Insurance (SDI): New Jersey requires employees to contribute to the state disability insurance program, which provides temporary benefits to workers who cannot work due to non-work-related illness or injury. The employee rate for 2024 ranges from 0.00% to 0.26% on the first $161,400 of wages. The exact rate varies based on your employer's experience rating, but most workers pay the maximum rate of 0.26%.
Family Leave Insurance (FLI): This program funds New Jersey's paid family leave benefit, which allows workers to take time off to bond with a new child or care for a seriously ill family member. The employee contribution rate for 2024 is 0.09% on the first $161,400 of wages. This is a relatively new tax that was expanded in recent years to provide more generous leave benefits.
Unemployment Insurance (UI): While the employer pays the bulk of unemployment insurance, employees in New Jersey also contribute. The employee UI rate is approximately 0.3825% on the first $42,300 of wages for 2024. This is relatively low in dollar terms but is still an additional deduction from your paycheck that many workers in other states do not face.
Workforce Development Partnership Fund (WPF): This small tax funds job training programs in New Jersey. The employee rate is 0.0425% on the first $42,300 of wages. While the amount is minimal (roughly $18 per year for most workers), it is another deduction that appears on your NJ pay stub.
In total, these NJ-specific payroll taxes can add approximately 0.7% to 0.8% on top of the standard FICA deductions for a typical worker, further reducing take-home pay compared to states without such additional payroll taxes.
Federal Income Tax Brackets
All New Jersey workers, like workers in every state, are subject to federal income tax on their earnings. The 2024 federal brackets are adjusted annually for inflation and are the single largest tax deduction for most workers. Here are the current federal brackets:
| Single Filer | Married Filing Jointly | Tax Rate |
|---|---|---|
| $0 - $11,600 | $0 - $23,200 | 10% |
| $11,601 - $47,150 | $23,201 - $94,300 | 12% |
| $47,151 - $100,525 | $94,301 - $201,050 | 22% |
| $100,526 - $191,950 | $201,051 - $383,900 | 24% |
| $191,951 - $243,725 | $383,901 - $487,450 | 32% |
| $243,726 - $609,350 | $487,451 - $731,200 | 35% |
| $609,351+ | $731,201+ | 37% |
The federal standard deduction for 2024 is $14,600 for single filers and $29,200 for married couples filing jointly. Head of household filers receive a $21,900 standard deduction. These amounts are subtracted from gross income to determine federal taxable income.
For a single NJ worker earning $85,000, the federal taxable income after the standard deduction would be $70,400, resulting in approximately $10,568 in federal income tax. This represents the largest single deduction from most paychecks, typically 2 to 3 times larger than the NJ state tax deduction for middle-income earners.
FICA: Social Security and Medicare
FICA taxes fund Social Security and Medicare and are applied identically across all states. These are payroll taxes that your employer withholds from each paycheck, with matching contributions from the employer side. The 2024 FICA rates for employees are:
- Social Security: 6.2% on earnings up to $168,600 (the wage base limit for 2024)
- Medicare: 1.45% on all earnings, no upper limit
- Additional Medicare Surtax: 0.9% on earnings above $200,000 (single) or $250,000 (married filing jointly)
The combined employee FICA rate of 7.65% makes this the second-largest deduction for most workers. On a salary of $85,000, the FICA deduction totals $6,502.50 ($5,270 for Social Security plus $1,232.50 for Medicare). Self-employed NJ workers pay double this amount (15.3%) since they cover both the employee and employer shares.
When combined with NJ's additional payroll taxes (SDI, FLI, UI, WPF), a New Jersey worker's total payroll tax burden can reach approximately 8.3% to 8.5% of gross income. This is notably higher than the FICA-only burden of 7.65% that workers in most other states face, adding another layer to New Jersey's overall tax burden.
NJ Paycheck Breakdown Explained
A New Jersey paycheck involves more deduction line items than paychecks in many other states. Understanding each line item helps you verify accuracy and plan your finances. Here is a typical breakdown of deductions for a NJ worker:
Pre-Tax Deductions: These reduce your taxable income before any taxes are calculated. Common pre-tax deductions include 401(k) or 403(b) contributions, health insurance premiums, HSA contributions, and FSA contributions. These deductions lower both your federal and NJ state taxable income, providing tax savings at your marginal rate.
Federal Income Tax: Based on your W-4 form elections and calculated using the progressive brackets. This is typically the largest single deduction, consuming 10% to 22% of gross income for most middle-income earners after the standard deduction.
NJ State Income Tax: Withheld based on your NJ-W4 form. NJ uses its own withholding tables that correspond to the seven-bracket progressive system. Unlike the federal system, there is no standard deduction, so the withholding starts from the first dollar of income (at the 1.4% rate).
Social Security (OASDI): A flat 6.2% on gross earnings up to $168,600. This appears as a separate line item on your pay stub.
Medicare (HI): A flat 1.45% on all gross earnings, plus 0.9% additional on earnings above $200,000 for single filers.
NJ State Disability Insurance (SDI): Up to 0.26% on the first $161,400 of wages. This funds temporary disability benefits.
NJ Family Leave Insurance (FLI): 0.09% on the first $161,400 of wages. This funds paid family leave benefits.
NJ Unemployment Insurance (UI): Approximately 0.3825% on the first $42,300 of wages. The employee contribution to NJ's unemployment fund.
NJ Workforce Development (WPF): 0.0425% on the first $42,300 of wages. A small tax funding job training programs.
For an NJ worker earning $85,000 with standard deductions and no pre-tax contributions, the total tax burden (federal, state, FICA, and NJ payroll taxes) typically consumes approximately 30% to 35% of gross income, leaving around $55,000 to $59,500 in annual take-home pay. The exact amount depends on filing status and deductions.
How to Use This Calculator
Getting an precise estimate of your New Jersey take-home pay takes just a few steps with this calculator. Follow this process for the most precise results:
- Enter your annual gross salary: This is your total yearly compensation before any deductions. If you know your hourly rate, multiply by 2,080 (40 hours times 52 weeks) for the annual equivalent. Include base salary only; bonuses and commissions can be calculated separately.
- Select your federal filing status: Choose Single, Married Filing Jointly, or Head of Household. This determines your federal standard deduction amount and which federal bracket table is used.
- Select your NJ filing status: NJ filing status may differ from your federal status. NJ offers Single, Married Filing Jointly, Married Filing Separately, and Head of Household options. Your NJ filing status affects which NJ bracket table applies.
- Choose your pay frequency: Select how often you are paid to see the per-paycheck breakdown. Common options include bi-weekly (26 times per year) and semi-monthly (24 times per year).
- Enter dependents: Each dependent provides an additional $1,500 NJ personal exemption, reducing your NJ taxable income.
- Enter pre-tax deductions: If you contribute to a 401(k) or pay health insurance premiums pre-tax, enter these to get an precise taxable income calculation. These reduce both federal and NJ taxable income.
- Click "Calculate Take-Home Pay": Review the detailed breakdown showing each deduction type, your effective tax rate, annual take-home pay, and per-paycheck net amount.
Remember that this calculator provides estimates. Your actual pay may differ based on additional deductions (life insurance, parking benefits, union dues), tax credits, or adjustments specific to your situation. For the most precise figures, refer to your actual pay stubs or consult a tax professional familiar with NJ tax law.
NJ vs. Neighboring States: Tax Comparison
New Jersey's tax burden is often compared unfavorably to its neighbors, but the full picture is more detailed than top-line rates suggest. Here is how NJ compares to nearby states:
| State | Top Income Tax Rate | Local Income Tax? | Notable Features |
|---|---|---|---|
| New Jersey | 10.75% | No | High state rate, no local taxes |
| New York | 10.9% | Yes (NYC 3.876%) | NYC residents face combined 14.7%+ |
| Pennsylvania | 3.07% (flat) | Yes (local EIT) | Low state rate but local taxes add up |
| Connecticut | 6.99% | No | Progressive brackets, lower top rate |
| Delaware | 6.6% | Yes (Wilmington) | No sales tax offsets income tax |
| Maryland | 5.75% | Yes (county taxes) | County taxes add 2.25%-3.20% |
For workers earning between $50,000 and $150,000, New Jersey's effective state income tax rate (roughly 3% to 5%) is actually comparable to many neighboring states once local taxes are factored in. A worker in Philadelphia pays 3.07% state tax plus 3.75% city wage tax, totaling 6.82%. A worker in New York City pays even more when combining state and city taxes.
Where New Jersey becomes particularly expensive is at the top end. The 10.75% rate on income over $1 million is among the highest in the nation and creates a strong incentive for very high earners to consider relocating. Combined with NJ's notoriously high property taxes (averaging $9,500+ per year), the overall tax burden for wealthy residents is substantial. However, for median-income earners, NJ's income tax burden alone is not dramatically different from its neighbors.
NJ Commuter Tax Situations
New Jersey's location between New York City and Philadelphia makes commuting across state lines extremely common. Understanding how taxes work for commuters is critical for accurately estimating your take-home pay.
NJ Resident Working in New York: This is the most common cross-border situation. If you live in NJ and work in NY, you will owe New York state income tax on your NY-sourced wages. You then file a NJ resident return and claim a credit for taxes paid to NY. If your NJ tax liability exceeds the NY tax already paid, you owe the difference to NJ. In practice, NY rates are typically equal to or higher than NJ rates for most income levels, so many NJ-to-NY commuters owe little or no additional NJ tax. However, if you earn more than $1 million, NJ's 10.75% rate may exceed NY's state rate (though not NY's combined state + city rate).
NJ Resident Working in Pennsylvania: Pennsylvania and New Jersey have a reciprocal tax agreement. This means NJ residents working in PA only owe NJ state income tax (not PA tax) on their wages. Your PA employer should withhold NJ taxes rather than PA taxes. If they withhold PA tax instead, you will need to file for a PA refund and pay NJ taxes separately.
NY or PA Resident Working in NJ: If you live in another state but work in New Jersey, you owe NJ income tax on your NJ-sourced wages. You file a NJ non-resident return and then claim a credit on your home state return. The reciprocal agreement with PA means PA residents working in NJ only owe PA tax on their wages, not NJ tax.
Remote Work Complications: The pandemic created new complexities for NJ commuters. If you previously commuted to NYC but now work from home in NJ, the tax treatment depends on your employer's location and the specific days worked in each state. New York's "convenience of the employer" rule means that NY may still tax your income even if you work from your NJ home, unless your employer specifically requires you to work remotely. This can result in being taxed by both states without full credit relief.
NJ Tax Deductions and Credits
New Jersey offers several deductions and credits that can reduce your state tax liability. While fewer and less generous than federal options, these can still provide meaningful savings:
Personal Exemptions: NJ provides a $1,000 personal exemption per filer ($2,000 for married filing jointly). Each dependent qualifies for an additional $1,500 exemption. While modest compared to the federal standard deduction, these exemptions reduce your NJ taxable income before brackets are applied.
NJ Earned Income Tax Credit: New Jersey offers a state EITC equal to 40% of the federal Earned Income Tax Credit. For 2024, this is one of the most generous state EITCs in the nation and provides significant assistance to low-income workers with children. The maximum NJ EITC can exceed $2,800 for qualifying families.
Property Tax Deduction or Credit: NJ homeowners can deduct up to $15,000 in property taxes from their NJ gross income, or claim a credit of up to $50 on their NJ return (whichever is more beneficial). Given NJ's high property taxes, the deduction is almost always more valuable for homeowners. Renters can deduct 18% of their rent paid as a property tax equivalent.
Child and Dependent Care Credit: NJ offers a credit for child care expenses that mirrors the federal credit. The NJ credit ranges from 10% to 50% of the federal credit amount, depending on your NJ gross income. This benefits working parents who pay for daycare or after-school care.
Retirement Income Exclusion: NJ residents aged 62 or older with income below $150,000 can exclude up to $100,000 of retirement income (pensions, annuities, IRA distributions) from NJ taxable income. Married couples filing jointly can exclude up to $100,000 of combined retirement income. This is a significant benefit that makes NJ more attractive for retirees than the headline tax rates suggest.
NJ 529 Plan Deduction: Contributions to the NJ BEST 529 college savings plan are not deductible on the NJ state return. This is a notable difference from many other states that do allow 529 deductions. However, earnings in the 529 plan grow tax-free and qualified withdrawals are tax-free at both federal and state levels.
Tax Planning for NJ Workers
Given New Jersey's high tax rates, strategic planning can save significant money. Here are proven strategies for NJ workers:
increase Pre-Tax Retirement Contributions: Each dollar contributed to a traditional 401(k) saves you taxes at your combined federal and NJ marginal rate. For a single filer in the 22% federal bracket and 6.37% NJ bracket, every $1,000 in 401(k) contributions saves approximately $284 in taxes. The 2024 contribution limit of $23,000 ($30,500 for those 50+) can generate substantial tax savings.
Consider Roth Contributions Carefully: While Roth 401(k) and IRA contributions do not provide an immediate tax break, they grow tax-free and are withdrawn tax-free in retirement. If you expect to be in a lower tax bracket in retirement (perhaps in a state with no income tax), traditional pre-tax contributions may be more beneficial. However, if you plan to remain in NJ through retirement, Roth contributions protect you from potential future NJ rate increases.
Health Savings Accounts (HSAs): NJ is one of only three states (along with California and Alabama) that does not give state-level tax benefits for HSA contributions. While HSA contributions reduce your federal taxable income, they do NOT reduce your NJ taxable income. This reduces the triple tax benefit that HSAs provide in other states, though the federal tax savings alone still make HSAs worthwhile.
Track Property Tax Deductions: If you own a home in NJ, make sure you are claiming the full property tax deduction on your NJ return. With average NJ property taxes exceeding $9,500, the deduction (up to $15,000) can save hundreds of dollars in state income tax annually.
Review Your NJ-W4 Annually: NJ withholding tables may not perfectly match your actual tax situation, especially if you have significant deductions or credits. Reviewing your withholding each year and adjusting your NJ-W4 prevents over-withholding (which is an interest-free loan to the state) and under-withholding (which can result in penalties).
Commuter Strategies: If you commute to NYC, verify that you are receiving the proper credit for NY taxes paid on your NJ return. Tax software sometimes mishandles the credit calculation, leading to overpayment. If you have the option to work from home in NJ versus commuting to NY, the tax implications can be significant and are worth discussing with a tax advisor.
Recent NJ Tax Changes
New Jersey's tax field has shifted notably in recent years, and staying current helps you plan accurately:
Millionaire's Tax (2020): New Jersey added the 10.75% bracket on income exceeding $1 million, up from the previous top rate of 8.97% on income above $500,000. This change generated an estimated $390 million in additional annual revenue but also accelerated the departure of some high-income residents. The impact on revenue versus out-migration remains debated.
EITC Expansion: The NJ Earned Income Tax Credit was increased from 30% to 40% of the federal EITC amount, providing more support for lower-income workers. The expansion also extended eligibility to workers aged 18-64 without children, who were previously excluded from the state credit.
Child Tax Credit: New Jersey introduced a state child tax credit providing up to $500 per child for families with income under $80,000. This relatively new benefit helps offset the high cost of raising children in the state.
Property Tax Relief Programs: NJ has expanded its ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) program, providing direct property tax relief payments. Homeowners with income up to $250,000 can receive up to $1,500, while renters with income up to $150,000 can receive up to $450. These payments are separate from the property tax deduction on the income tax return.
Corporate Business Tax Changes: While not directly affecting individual paychecks, NJ's corporate surtax (which was 2.5% on top of the base rate for large companies) has been gradually phased down and is set to expire. This may influence future debates about individual tax rates as the state's revenue mix shifts.
Frequently Asked Questions
Is New Jersey a good state for retirees from a tax perspective?
For moderate-income retirees, New Jersey is more favorable than its reputation suggests. The state excludes up to $100,000 of retirement income for residents aged 62+ with income below $150,000, and Social Security benefits are not taxed. However, high-income retirees face the full progressive rate structure, and the state's high property taxes remain a concern regardless of income level. Many retirees relocate to states like Florida or Pennsylvania (which does not tax most retirement income) to reduce their overall tax burden.
How does NJ handle cryptocurrency and investment income?
New Jersey taxes capital gains as ordinary income, meaning investment profits are subject to the same progressive rate structure as wages. There is no preferential long-term capital gains rate at the state level (unlike the federal system, which taxes long-term gains at lower rates). Cryptocurrency gains are treated as capital gains. This means NJ investors with significant gains can face combined federal and state rates exceeding 30% on investment income.
Do NJ residents pay taxes on out-of-state rental income?
Yes, NJ residents owe NJ income tax on all worldwide income, including rental income from properties in other states. You will also owe income tax to the state where the rental property is located (if that state has an income tax). NJ provides a credit for taxes paid to the other state, preventing full double taxation, but you may owe additional NJ tax if the NJ rate exceeds the other state's rate on that income.
How does NJ's "exit tax" work?
When selling a home in NJ as a non-resident or while moving out of state, the buyer is required to withhold an estimated income tax payment equal to 2% of the sale price or the estimated gain (using a GIT/REP form). This is not a separate tax but rather an estimated payment toward any capital gains tax owed on the sale. If the actual tax is less than the amount withheld, you receive a refund when filing your NJ return. This provision ensures that departing residents do not avoid paying NJ tax on home sale gains.
Are NJ unemployment benefits taxable?
NJ unemployment benefits are not subject to NJ state income tax. However, they are taxable for federal income tax purposes. You can choose to have federal taxes withheld from your unemployment benefits, or you can pay the federal tax when filing your annual return. This state exemption for unemployment benefits is a modest advantage during periods of job loss.
Can I deduct student loan interest on my NJ return?
No, NJ does not allow a deduction for student loan interest paid. While the federal return allows a deduction of up to $2,500 in student loan interest (subject to income limits), this deduction does not carry over to the NJ state return. Your NJ taxable income is calculated from your NJ gross income using NJ-specific adjustments, and student loan interest is not one of the allowed deductions.
External References and Resources
For the most current and official information on New Jersey taxes, consult these authoritative sources:
- NJ Division of Taxation - Official state tax agency with forms, rate tables, filing guidance, and the latest legislative updates.
- IRS Tax Withholding Estimator - Federal tool for verifying your W-4 withholding accuracy.
- Social Security Administration - Information on FICA taxes, benefit calculations, and the annual wage base limit.
- NJ Department of Labor - Details on NJ-specific payroll taxes including SDI, FLI, and unemployment insurance.
New Jersey Salary Field by Industry
New Jersey consistently ranks among the highest-paying states in the nation, driven by its concentration of pharmaceutical headquarters, financial services firms, and technology companies along the I-95 corridor. The state's proximity to both New York City and Philadelphia creates a unique labor market where many residents commute across state lines.
| Industry | Median Salary (2025) | Top Region |
|---|---|---|
| Pharmaceuticals and Biotech | $112,000 | Central NJ (Mercer, Middlesex) |
| Financial Services | $105,000 | Hudson County, Jersey City |
| Information Technology | $98,000 | Bergen, Morris Counties |
| Healthcare (Clinical) | $82,000 | Statewide |
| Engineering and Manufacturing | $91,000 | Passaic, Bergen Counties |
| Education (K-12 Public) | $72,000 | Suburban districts |
| Construction and Trades | $68,000 | Shore counties, North Jersey |
| Retail and Hospitality | $36,000 | Shore counties, statewide |
NJ-Specific Payroll Tax Considerations
New Jersey has several payroll taxes that are uncommon in other states. State Disability Insurance (SDI) requires employee contributions at a rate set annually by the state. Family Leave Insurance (FLI) is funded through employee payroll deductions and provides partial wage replacement for workers who need time off to bond with a new child or care for a seriously ill family member. The Workforce Development Partnership (WDP) fund and Supplemental Workforce Fund (SWF) are additional small deductions that fund job training programs.
| NJ Payroll Tax | 2025 Rate (Employee) | Wage Base | Purpose |
|---|---|---|---|
| State Disability Insurance | 0.00% (varies annually) | $161,400 | Short-term disability coverage |
| Family Leave Insurance | 0.09% | $161,400 | Paid family leave benefits |
| Unemployment Insurance (Employee) | 0.3825% | $42,300 | State unemployment fund |
| Workforce Development | 0.0425% | $42,300 | Job training programs |
| Supplemental Workforce Fund | 0.0425% | $42,300 | Additional training |
Cross-Border Commuter Tax Rules
New Jersey has reciprocal tax agreements with Pennsylvania, meaning residents of either state who work in the other pay income tax only to their state of residence. However, no such agreement exists between New Jersey and New York. NJ residents who work in New York must file returns in both states, paying New York income tax first and then claiming a credit on their NJ return for taxes paid to NY. This often results in NJ residents who commute to New York City paying a higher effective rate, since NYC imposes its own local income tax of 3.078% to 3.876% on top of NY state rates. Conversely, New York residents who work in NJ pay NJ income tax and claim a credit against their NY liability.
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