Easily manage employment in New Jersey

Payroll management in New Jersey

New Jersey has a strong economy supported by industries such as healthcare, finance, manufacturing, and technology. With state-specific payroll regulations, including a high minimum wage, progressive income tax rates, and paid leave requirements, employers in New Jersey must ensure compliance with both state and federal payroll laws. Understanding these regulations is crucial for smooth payroll operations and compliance.

Payroll breakdown in New Jersey

Employers in New Jersey must adhere to both federal and state payroll regulations regarding wages, taxes, and benefits. Below is an overview of key payroll components:

Minimum wage and overtime

• Minimum wage: New Jersey’s minimum wage is $15.13 per hour for most employees.
• Overtime rules:
• New Jersey follows federal overtime laws, requiring employers to pay 1.5 times an employee’s regular rate for hours worked beyond 40 hours in a workweek.
• Some exemptions apply based on job classification and industry.

State income tax

• New Jersey has a progressive state income tax system, with rates ranging from 1.4% to 10.75%, depending on income levels.
• Employers must withhold state income tax and remit it to the New Jersey Division of Taxation.

Unemployment insurance (UI) tax

• Employers must contribute to New Jersey’s Unemployment Insurance (UI) program, managed by the New Jersey Department of Labor & Workforce Development.
• The UI wage base in New Jersey is $42,300.
• UI tax rates vary based on an employer’s experience rating and range from 0.5% to 5.8%.
• New employers typically pay a 2.8% UI tax rate.

Workers’ compensation

• New Jersey law requires all employers with at least one employee to carry workers’ compensation insurance to cover medical expenses and lost wages for employees injured on the job.
• Some exemptions apply, including certain independent contractors and self-employed individuals.

Paid family and medical leave

• New Jersey Paid Family Leave: Employees are eligible for up to 12 weeks of paid leave under the New Jersey Family Leave Insurance (FLI) program.
• Temporary Disability Insurance (TDI): Employees may receive cash benefits for non-work-related injuries or illnesses.
• Employers must withhold contributions from employee wages and remit payments to the New Jersey Department of Labor.

Payroll tax filing and payment deadlines

• Employers must register for a New Jersey Employer Tax Account with the New Jersey Division of Revenue and Enterprise Services.
• State withholding tax returns must be filed monthly, quarterly, or annually, depending on employer classification.
• UI tax reports must be submitted quarterly to the New Jersey Department of Labor & Workforce Development.
• Payroll tax payments can be made electronically through the New Jersey Online Tax Filing System.

Quick facts: Important considerations for employers

• State minimum wage compliance: New Jersey’s minimum wage is higher than the federal rate, and employers must comply with state laws.
• Final paycheck rules:
• If an employee is terminated or resigns, employers must provide the final paycheck by the next scheduled payday.
• New hire reporting: Employers must report new hires to the New Jersey New Hire Reporting Center within 20 days.
• Paid sick leave: New Jersey requires employers to provide one hour of paid sick leave for every 30 hours worked, up to 40 hours per year.
• Payroll recordkeeping: Employers must maintain payroll records for at least six years to comply with state and federal laws.
• Right-to-work state: New Jersey is not a right-to-work state, meaning employees may be required to join a union if applicable.

Run payroll in New Jersey with Remote

Managing payroll in New Jersey requires careful attention to state-specific regulations, including minimum wage compliance, UI tax requirements, and workers’ compensation laws. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be, book a demo with Remote today.