New Jersey Payroll: Employer Tax Guide

New Jersey asks more of a small employer than almost any state in the country, and the reason is arithmetic rather than any single difficult rule. My advice if you hire there: work through that arithmetic before the first payday. This guide covers what New Jersey requires, what changed for 2026, what is already set for 2027, and how 10 payroll providers price the work.

Three separate contributions come out of the employer, five more are withheld from employees, and they do not all stop at the same place: from January 1, 2027, some cap at $46,400 of wages and others run to $177,100 ($44,800 and $171,100 in 2026).

Compliance is split across two state agencies with different filing systems, and two cities levy their own employer payroll taxes on top. Every employer regardless of size owes paid sick leave, and any employer with twenty or more staff must offer a pre-tax commuter benefit.

None of that is conceptually hard. All of it is easy to get partly wrong, and the most common error, applying a single wage cap to contributions that have two, does not surface until high earners cross the lower threshold partway through the year.

Eight state payroll taxes across two agencies

A New Jersey employer handles eight state payroll taxes, split between two agencies. Most state payroll guides open with a withholding rate, but here that would describe about an eighth of the obligation, so the table below shows the whole set first.

Gross income tax runs on graduated brackets from 1.4 percent to 10.75 percent, with the withholding tables reaching 11.8 percent at the top. New Jersey has a reciprocity agreement with Pennsylvania only, so a Pennsylvania resident working in New Jersey gives the employer Form NJ-165 to stop New Jersey withholding. Residents of New York, Delaware, and every other state are subject to ordinary New Jersey withholding.

The split across two agencies is the structural feature that makes New Jersey feel heavier than states with a single revenue authority. Income tax registration and remittance go to the Division of Taxation; the entire insurance layer goes to the Department of Labor and Workforce Development (NJDOL). Registration for both starts with Form NJ-REG through the Division of Revenue and Enterprise Services.

Form NJ-W4 and the five rate tables

New Jersey runs its own withholding certificate, and it does not behave like the federal one. Form NJ-W4 carries five rate tables lettered A through E. An employee with a second job or a working spouse may use the wage chart printed on the form to pick the letter that lifts withholding toward the rate their combined income will actually meet.

Every table tops out at 11.8 percent on annual wages above $1,000,000, and each allowance shelters $1,000 of annual pay. Line 5 adds a flat dollar amount to every check. Line 6 claims exemption, which is open only to a single filer expecting $10,000 or less of wages and taxable nonwage income for the year, or $20,000 or less filing jointly, and it lapses each December.

How often you remit withholding

Remittance frequency comes from what you withheld last year rather than from your pay cycle. An employer whose prior-year withholding liability reached $10,000 becomes a weekly payer, remits by the Wednesday of the week after the week containing the payday, and files Form NJ-927-W each quarter in place of the standard NJ-927.

Everyone else remits monthly on Form NJ-500, by the fifteenth of the following month, whenever the tax due for either of the first two months of a quarter reaches $500. Anything below $500 rides along with the quarterly return instead. The Division of Taxation requires every withholding payment to move electronically, and the quarterly NJ-927 and WR-30 returns must be filed electronically as well.

Unemployment insurance

New employers pay the assigned new-employer rate, a combined 2.8 percent through June 30, 2027, made up of 2.6825 percent unemployment insurance plus the 0.1175 percent workforce funds component. They stay on new-employer rates until experience rating (a rate based on the employer’s own contribution and claims record) begins on July 1 of their fourth year, according to the NJDOL employer handbook.

The two wage bases and why they matter

The two wage bases are the single most consequential mechanical detail in New Jersey payroll, and the one that produces quiet errors rather than obvious ones.

The employee rates for temporary disability insurance (TDI) and family leave insurance (FLI) both fell for 2026: TDI from 0.23 percent and FLI from 0.33 percent. Family leave insurance is funded entirely by employees, so an employer that budgets for a matching contribution is budgeting for something that does not exist.

On the benefit side, the maximum weekly benefit for both disability and family leave is $1,158 from January 1, 2027 ($1,119 in 2026). From the same date, eligibility requires either 20 base weeks, meaning weeks with at least $319 of earnings, or $16,000 of base-year earnings ($310 and $15,500 in 2026).

The Department of Labor and Workforce Development has already published the 2027 wage bases and benefit maximums, but it sets the 2027 employee contribution rates separately, so the 0.19 and 0.23 percent figures above are the 2026 rates.

Newark and Jersey City payroll taxes

Two New Jersey cities, Newark and Jersey City, levy employer payroll taxes. These are not withheld from employees; they are a direct employer cost calculated on covered payroll, and they are filed separately from everything at the state level.

The two ordinances treat residency differently, which is worth reading twice. Newark’s 2026 payroll tax instructions exclude resident payroll only when residents are more than half the workforce, and then only for the most recently hired residents above the 50 percent mark.

The Jersey City payroll tax ordinance excludes every resident employee. Same instinct, different mechanism, and a payroll system needs to know which city it is applying.

Minimum wage, sick leave, and the commuter mandate

Payroll taxes are only part of what New Jersey asks of an employer. The state also sets five minimum wage tiers, requires earned sick leave from the first employee, and makes employers with 20 or more employees offer a commuter benefit.

Five minimum wage tiers

The general rate rises $0.56 to $16.48 on January 1, 2027, after a $0.43 step to $15.92 in 2026. It adjusts every January by the change in the CPI-W, the federal consumer price index for urban wage earners and clerical workers. The Department of Labor announces the next rate by September 30 (NJDOL minimum wage notice for 2027).

The small and seasonal employer rate follows its own statutory schedule through January 1, 2028, which puts it at $16.25 for 2027, still below the standard rate.

Earned sick leave from the first employee

The New Jersey Earned Sick Leave Law covers every employer regardless of size. Employees accrue one hour for every 30 hours worked, up to 40 hours per benefit year, and accrual begins from the first hour worked rather than after a waiting period. Employers must also give employees a written notice of rights under the law.

The commuter benefit mandate

Every employer with 20 or more employees must offer all of them a pre-tax transportation fringe benefit under the New Jersey Transit Benefits Law, in force since March 1, 2020. Staff covered by a collective bargaining agreement already in effect when the law was enacted were exempt only until that agreement expired.

The federal monthly limit on pre-tax commuting benefits under Internal Revenue Code Section 132(f) is $340 for 2026, up from $325, according to the IRS. Under the New Jersey law, an employer that still offers nothing after a 90-day window to comply faces a civil penalty of $100 to $250 for a first violation and $250 for each further 30-day lapse.

Worker classification and quarterly filings

New Jersey applies the ABC test to worker classification, one of the strictest standards in the country: the test has three prongs, and failing any single one makes the worker an employee. NJDOL regulations clarifying the test became operative on October 1, 2026, according to the department’s announcement.

Quarterly filings are Form NJ-927 and Form WR-30, both due on the thirtieth of the month following each quarter. That is one day earlier than the federal Form 941 deadline in three quarters out of four; for the first quarter, both fall on April 30, per the Form 941 instructions. The one-day gap trips up employers who batch their quarterly filings on a single date.

10 payroll providers for New Jersey employers compared

Every provider below files New Jersey state withholding and the unemployment and disability contributions. The differentiators here are unusually concrete: whether the platform applies the two wage bases separately, and whether it files the Newark or Jersey City returns if either applies to you.

OnPay

OnPay sells one payroll plan at $49 per month plus $6 per employee, with no payroll tiers to climb; HR tools and time tracking are optional add-ons. Local tax filing sits in the base plan rather than behind an upgrade, which matters for Newark and Jersey City employers. OnPay also registers new state tax accounts automatically, which helps when a hire lands across a state line.

Gusto

Gusto pairs automatic tax filing and published pricing with onboarding built into the same account. Simple runs $49 per month plus $6 per employee after a base increase from $40 during 2025, and it files NJ-927, WR-30, and the new hire report.

Gusto also registers for and files the Jersey City payroll tax automatically. For Newark, its help center tells employers to register with the city themselves, so confirm how the Newark return is handled before you sign.

The single-state limit on Simple bites hard here. New Jersey sits between New York and Pennsylvania with heavy commuter flows in both directions, so one cross-border hire moves you to Plus at $80 plus $12 per employee.

Patriot Software

Patriot’s Full Service plan is $37 per month plus $5 per employee, the cheapest full-service option on this list from five employees up. It stands out in New Jersey because it files local and city taxes rather than treating them as an add-on. Basic is $17 plus $4 if you file taxes yourself, which here means handling NJ-927, WR-30, and any city returns by hand.

Square Payroll

At $35 per month plus $6 per person, Square sits near the bottom of published full-service pricing. The plan covers federal and state tax payments and filings plus the new hire report, but Square’s New Jersey filing list stops at the state returns and names neither city payroll tax. For a restaurant already running Square point of sale, timecard data flows into payroll with no integration work.

SurePayroll

SurePayroll is owned by Paychex and built for very small employers and household employers. Its single small business plan is $29 per month plus $7 per employee, with a flat $9.99 monthly multi-state fee. Where local taxes apply, SurePayroll charges a separate fee rather than including them in the plan, which is a real cost for an employer in either taxing city.

QuickBooks Workforce Payroll

Workforce Payroll, the entry tier renamed from Core in May 2026, is $50 per month plus $7 per employee. The argument for it is unchanged: if your books live in QuickBooks Online, payroll reaches the general ledger without an export.

Workforce Payroll pays no local taxes, and Intuit supports certain local taxes only on its Premium and Elite tiers, which matters if you sit in one of the two taxing cities.

ADP RUN

Every ADP RUN package calculates, files, deposits, and reconciles payroll taxes, and ADP pays the resulting fines if it makes a filing error. New Jersey gives that promise plenty to do: two wage bases, two city taxes, and rate changes at two points in the year.

The cost is opacity. ADP does not publish RUN pricing: all four packages (Essential, Enhanced, Complete, and HR Pro) are quoted individually. ADP says RUN requires no contract and that service can be terminated at any time.

Paychex Flex

Paychex competes on service rather than software. Its four payroll packages (Basic, Foundations, Advanced, and Complete) all run on Paychex Flex and are priced by individual quote, and Complete includes a dedicated payroll specialist. In New Jersey the service model earns its keep when a city notice arrives or a disability reconciliation does not balance.

Paylocity

Paylocity sits between small-business payroll and full human capital management (HCM) software, aimed at companies that have outgrown basic payroll. It publishes detailed per-state tax facts including New Jersey, and leave accrual tracking is native, which suits the earned sick leave obligation. Pricing is quote-based and implementation is a project rather than a signup.

Rippling

Rippling unifies payroll, HR, and IT provisioning on one employee record. Its pricing page is a quote form, but its small-business page starts payroll plans at $8 per user per month plus a $40 monthly base fee. Rippling’s own blog puts the core HRIS (HR information system) platform at $8 per employee per month and payroll at another $8 per employee billed annually, or $10 billed monthly, so a configured quote can run higher than that start.

Rippling’s blog also estimates $15 to $25 per employee per month for a 100-employee company running HRIS, payroll, benefits administration, and time and attendance.

What each provider actually costs a New Jersey employer

The table below models published rates at three headcounts, with a column for local tax handling because that is the axis that separates outcomes here.

Patriot is the cheapest published option at every headcount on the table, and its Full Service plan files city taxes, an unusually good combination for a New Jersey employer inside one of the taxing cities. Square comes next on price, but its New Jersey filing list stops at the state returns.

SurePayroll looks competitive on base fee and charges separately for local taxes; QuickBooks leaves local taxes to its upper tiers. For a business outside Newark and Jersey City, that distinction disappears and the comparison reverts to ordinary price and feature grounds.

Choosing a payroll provider for New Jersey

Choosing a payroll provider for New Jersey comes down to five questions. Put each one to every provider on your shortlist before you sign, and check the answers against the rules above.

Before you choose

FirstHR is an onboarding and HR platform, not a payroll provider. Payroll runs, payroll tax filing, and benefits administration come from the providers above, and in a state with two wage bases and two city payroll taxes, choosing one that handles those correctly is the most valuable decision on this page.

What we handle is the document layer that feeds payroll: onboarding workflows that put Form NJ-W4, the federal W-4, and the I-9 on each new hire’s first-day task list, e-signatures on offer letters, employee records, and document management for US small businesses at a flat $98 a month for up to 10 people or $198 for 11 to 50.

Several New Jersey obligations are document problems rather than payroll problems: collecting the NJ-W4 alongside the federal W-4 before day one, issuing the written notice of rights under the Earned Sick Leave Law and keeping each signed acknowledgment, documenting the commuter benefit offer at 20 or more employees, and keeping the twenty-day new hire report on the onboarding task list.

The order I would follow: settle the payroll provider first, using the five questions above, then set up the document side so every item on that list has an owner and a deadline.

Frequently Asked Questions

What are the New Jersey payroll taxes an employer has to handle?

Three employer-paid and five employee-withheld state contributions plus federal. Employer: unemployment insurance, temporary disability, and workforce fund contributions on wages to $46,400 from January 1, 2027 ($44,800 in 2026). Employee: gross income tax, unemployment and workforce funds on that same base, and temporary disability and family leave to $177,100 ($171,100 in 2026).

What is the New Jersey withholding tax rate?

There is no single rate. Gross income tax is graduated and the withholding tables top out at 11.8 percent above a million dollars of annual pay, with the applicable table set by Form NJ-W4 rather than the federal W-4. Payment frequency is separate: weekly by Wednesday once prior-year liability reached $10,000, monthly on Form NJ-500 by the fifteenth once a month reaches $500 of tax, and quarterly otherwise.

Why does New Jersey have two different wage bases?

Because the programs are funded separately. Unemployment, workforce funds, and the employer share of disability cap at $46,400 from January 1, 2027 ($44,800 in 2026), while employee disability and family leave run to $177,100 ($171,100). An employee earning $120,000 stops accruing the first group in the spring and continues the second all year, which is why applying a single cap produces errors that surface only at reconciliation.

What are the New Jersey TDI and FLI rates?

For 2026, employee temporary disability insurance (TDI) is 0.19 percent to a maximum of $325.09, down from 0.23 percent. Employee family leave insurance (FLI) is 0.23 percent to a maximum of $393.53, down from 0.33 percent. Both run on the $171,100 base, which rises to $177,100 on January 1, 2027, with the 2027 rates set separately.

Family leave has no employer contribution; new employers pay temporary disability at 0.50 percent on the lower base. The maximum weekly benefit for both is $1,158 from January 1, 2027 ($1,119 in 2026).

What is the New Jersey unemployment insurance rate and wage base?

$46,400 from January 1, 2027 ($44,800 in 2026, a base that reflected a 2024 average weekly wage of $1,598.66). New employers pay a combined 2.8 percent through June 30, 2027, comprising 2.6825 percent unemployment plus 0.1175 percent workforce funds, and stay on new-employer rates until experience rating begins on July 1 of their fourth year. Employer rates run on a July to June fiscal year.

Do Newark and Jersey City have their own payroll taxes?

Yes, both at 1 percent of covered payroll, employer-paid rather than withheld, and filed quarterly. Both also cover work supervised from the city even when it is performed elsewhere. Newark excludes resident payroll only above the 50 percent mark when residents are a majority of the workforce; Jersey City excludes every resident employee. Neither applies at $2,500 or less of covered payroll in a quarter.

What is the New Jersey minimum wage?

$16.48 for most employees from January 1, 2027, up $0.56 from $15.92. In 2027 seasonal and small employers with fewer than six employees pay $16.25, agricultural employers $15.00, and long-term care direct care staff $19.48. The tipped cash wage is $6.61 with a $9.87 maximum tip credit. The standard rate adjusts each January by the change in the CPI-W.

Does New Jersey require employers to offer a commuter benefit?

Yes, for every employer with 20 or more employees, under the New Jersey Transit Benefits Law in force since March 1, 2020. The obligation is to offer all employees a pre-tax transportation fringe benefit, not to fund it. The federal monthly limit is $340 for 2026, up from $325.

Does New Jersey require paid sick leave?

Yes, from every employer regardless of size, under the Earned Sick Leave Law effective October 29, 2018. Accrual is one hour per 30 hours worked up to 40 hours per benefit year, beginning from the first hour worked rather than after a waiting period, and employers must provide a written notice of rights.

How long do New Jersey employers have to report a new hire?

Twenty days from the date of hire or rehire, to the New Jersey New Hire Reporting Center. A new hire also needs the federal W-4, Form NJ-W4, Form I-9, the sick leave notice of rights, and the commuter benefit offer at 20 or more employees. Quarterly filings are NJ-927 and WR-30 on the thirtieth of the month after quarter end.