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The 2024 tax season will soon be upon us, meaning that you need to start looking at the payroll, IRS tax requirements, and any payroll changes that have happened in New Jersey. Finding the changes on your own can be overwhelming, particularly when you have a business to operate. To assist with that: Here is a comprehensive small business payroll guide for New Jersey employers to follow. We have included specific 2024 updates, as staying compliant year-to-year is crucial to avoid penalties, ensure accurate employment compensation, and support your business’s growth.

 

Key 2024 Payroll Compliance Changes for Small Business in New Jersey

Here is a summary of recent data on NJ payroll laws and IRS updates to tax requirements for small businesses:

 

Compliance Category	Description	Key 2024 Updates
Minimum Wage Requirements	Minimum wage for most NJ employees	$15/hour for most employees, exemptions apply for tipped, seasonal, and industry-specific workers
Employee Classification	Differentiates exempt (no overtime) and non-exempt (eligible for overtime)	Follow FLSA & NJ standards; confirm classification to avoid penalties
Payroll Tax Obligations	Withholding for state & federal income taxes, FICA contributions, UI, and other insurance funds	Social Security wage base increased to $168,600; ACA affordability threshold now 8.39%
2024 W-4 Form	Updated W-4 form to refine withholding calculations for employees	Encourages employees to check and update W-4 to reflect personal or income changes
Family Leave & Disability Insurance	NJ-mandated insurance programs for family and medical leave	Updated FLI & TDI contribution rates based on employee wages
Overtime & Break Requirements	NJ follows federal law on overtime and has no mandatory breaks for adult employees, though paid breaks under 20 minutes are required if offered	Ensure overtime is paid for non-exempt employees for hours over 40 per week
Anti-Discrimination & Wage Equality	Equal pay for similar work and training requirements to support fair wage practices	Review pay scales to comply with NJ Equal Pay Act; provide regular anti-discrimination training
Reporting Terminated Employees	Requirements for reporting and issuing final paychecks to terminated employees	NJ mandates prompt reporting to the Department of Labor; final paycheck due by next payday
Workers’ Compensation	Mandatory insurance coverage for all employees	Ensure up-to-date coverage for all employee categories

 

Recent Updates to New Jersey’s Payroll Laws

2024 has been a busy year for updated payroll and tax laws and requirements. New Jersey has changed the following things:

 

Pay Transparency

Although this doesn’t impact payroll directly, a new law has been passed that requires employers to include hourly and salary wage ranges on job postings. SB2310 applies to a variety of businesses and organizations that employ people or take in applications in New Jersey. Any business that violates pay transparency has to pay a fine of $300. Subsequent violations are doubled.

 

NJ Minimum Wage Increase

New Jersey raised its minimum wage to $15 per hour for most employees, reflecting a push to ensure fair compensation and improve workers’ quality of life. This increase is critical for payroll adjustments and budgeting, especially for small businesses to stay compliant and avoid penalties.

 

Family and Medical Leave Expansion

Family leave benefits have expanded, providing more paid leave for eligible employees. This change enables employees to receive compensation for family- or health-related absences, offering more support for workers during personal challenges.

 

Anti-Discrimination Compliance Costs

New Jersey strengthened protections against workplace discrimination, requiring employers to proactively address complaints. Updated policies and training on anti-discrimination are now essential for compliance and to foster an inclusive workplace. How does this affect payroll directly? Enhanced anti-discrimination protections require that employers review and potentially revise pay structures and payroll policies to ensure equal pay practices across gender, race, and other protected categories.

 

Unemployment Reporting

Recent amendments now mandate that employers report employee terminations immediately to the NJ Department of Labor, with strict penalties for non-compliance. This measure aids in quick processing of unemployment benefits and strengthens workforce protections.

 

Temporary Worker Pay Statements

Temporary help service firms must provide itemized pay statements and register with the state, offering further transparency and security for temporary laborers.

 

Reporting Terminated Employees

New Jersey requires employers to report terminated employees promptly to the Department of Labor. This measure aids in managing unemployment claims efficiently and minimizing issues with benefits distribution. Furthermore, New Jersey mandates that final paychecks be issued by the next scheduled payday following an employee’s termination, or sooner if required by company policy.

 

IRS Tax Changes for Employers in NJ in 2024

The Internal Revenue Service has also updated certain aspects of tax requirements for both individuals and businesses in New Jersey. Here are some things you need to know:

 

Inflation Adjustments for Standard Deductions

The standard deduction amounts for individuals have been adjusted for inflation. For single filers, it is now $14,600, and for married couples filing jointly, it has increased to $29,200. This affects payroll by influencing withholding calculations, as employees may choose to adjust their withholding on the new W-4 forms to reflect the changes in their anticipated taxable income.

 

Updates to W-4 Withholding Form

The IRS made updates to the W-4 form, which now includes steps for declaring dependents and specific credits to refine withholding accuracy. Importantly, new employees or those making withholding changes must use the updated 2024 form, though those with consistent financial circumstances do not need to update theirs. The changes remove personal withholding allowances, simplifying the withholding process.​

 

Changes to Employer Shared Responsibility Penalties

The ACA affordability threshold has increased, setting the minimum employer contribution for health insurance at 8.39% of an employee’s household income for 2024. Employers offering insurance must adjust their contributions to ensure compliance with this limit to avoid penalties.

 

Credit and Deductions Updates

Adjustments have been made to the Earned Income Tax Credit (EITC) and other dependent credits, which impact employees’ withholding needs, and indirectly influence payroll, as employees may update their W-4s to reflect these credits.

 

Contact a Small Business Accountant for Your NJ Payroll Today

NJ payroll compliance is complex because you have to stay up-to-date with new legislation, such as payroll transparency and minimum wage adjustments. Small businesses in New Jersey like yours can benefit from hiring a local accountant, as well as adopting digital payroll solutions and maintaining records. As the state continues to emphasize employee rights and benefits, staying proactive and informed is essential for avoiding costly penalties and creating a fair, compliant workplace.

 

TMD Accounting is here to simplify NJ payroll compliance for you. Our family-owned and operated business has been around for over 40 years, so you can trust us to understand NJ and IRS tax requirements. For you, that means more peace of mind during tax reason. Contact us today 1-856-228-2205 at to ensure your payroll is fully compliant for the rest of 2024 and beyond.