Payroll Taxes in New Jersey: What Small Businesses Need to Know
New Jersey’s payroll tax system is multifaceted, requiring employers to manage both state and federal obligations. Missing deadlines or incorrect filings can result in hefty fines.
New Jersey State Payroll Taxes
Small business owners in New Jersey are responsible for several state-specific payroll taxes, including:
- Unemployment Insurance (UI): A mandatory tax that funds unemployment benefits for workers.
- Temporary Disability Insurance (TDI): Provides income for employees unable to work due to non-work-related injuries or illnesses.
- Family Leave Insurance (FLI): Covers employees taking leave to care for a family member.
These taxes are calculated as a percentage of employees’ wages, and the rates can vary depending on your business size and industry.
- Real-Life Example: One of our longtime clients, Gugel Painting LLC, relies on TMD Accounting to ensure payroll taxes are accurate and submitted on time. They’ve shared how much time and stress our support saves them.
Visit the New Jersey Department of Labor’s Employer Handbook for additional payroll tax details.
Comparison Table of Payroll Requirements in New Jersey
Category |
Requirement in New Jersey |
Special Considerations |
Minimum Wage (2025) |
$15 per hour for most workers | Small businesses with <6 employees may have slightly lower rates |
Tipped Employees Minimum Wage |
Employers must ensure tips + base pay meet $15/hour | Employers may need to top up wages if tips don’t meet the minimum |
Overtime Pay |
Time-and-a-half for hours worked over 40 in a workweek | Certain salaried workers are exempt (e.g., executive roles) |
Unemployment Insurance (UI) |
Mandatory for all employers; rate varies based on industry and size | Rates and reporting schedules vary based on business type |
Temporary Disability Insurance (TDI) |
Covers employee income during non-work-related injuries/illnesses | Employers and employees both contribute to TDI taxes |
Family Leave Insurance (FLI) |
Covers leave for employees caring for a family member | Employers are required to withhold contributions from employees |
Federal Payroll Taxes and Compliance
Federal payroll taxes include Social Security, Medicare, and federal unemployment taxes (FUTA). Ensuring accurate coordination between federal and state taxes is crucial for avoiding discrepancies.
- Client Highlight: Phil, one of TMD Accounting’s team members, frequently helps small business owners reconcile their federal and state filings, ensuring every dollar is accounted for.
Complying with New Jersey’s Wage Theft Prevention Laws
New Jersey has stringent wage theft laws that protect employees from unpaid wages and improper deductions. The Wage Theft Act also increases penalties for non-compliance, making it essential for employers to maintain accurate records and pay employees correctly.
Required Pay Stub Information
New Jersey employers are required to provide detailed pay stubs that include:
- Gross and net wages
- Hours worked
- Pay rate
- Deductions
- Example: At TMD Accounting, we’ve helped several South Jersey businesses implement payroll software that automates pay stub generation, ensuring compliance and saving time.
How to Avoid Payroll Mistakes
Avoiding Common Payroll Mistakes in New Jersey
Even small errors in payroll can result in costly consequences for businesses. Here are two frequent issues we’ve seen in our years of service:
Misclassifying Employees
Misclassifying employees as independent contractors is one of the most common payroll mistakes. The New Jersey Department of Labor has strict guidelines on employee classification, and violations can lead to back taxes and penalties.
- Client Case Study: One local business owner came to TMD after facing fines for improperly classifying employees. With our guidance, they corrected their classifications and set up proper payroll processes to avoid future issues.
Missing Payroll Tax Deadlines
Late payroll tax payments can lead to significant fines. TMD Accounting works with clients to implement automated systems that ensure timely submissions.
External Link Opportunity: The IRS Payroll Tax Calendar is a helpful tool for tracking federal deadlines.
Simplifying Payroll Compliance: TMD Accounting’s Approach
At TMD Accounting, we know how overwhelming payroll compliance can be for small business owners. Here’s how we help make the process easier:
Leverage Technology
We recommend payroll software like QuickBooks, Gusto, or ADP to automate calculations, generate pay stubs, and ensure tax compliance.
Partner with a Local Accounting Expert
Having an experienced accountant by your side can make all the difference. At TMD Accounting, we’ve spent over 20 years helping businesses in Gloucester County and beyond streamline their payroll processes.
- From Our Clients: “Phil is great. He has been taking care of my business since day one. Very professional and prompt,” says Tim Mater, a satisfied small business owner.
FAQs About Payroll Laws in New Jersey
- What is the minimum wage for tipped employees in New Jersey? Employers must ensure that combined tips and base wages meet the state’s minimum wage requirement.
- Do small businesses need to pay Family Leave Insurance? Yes, all New Jersey employers are required to contribute to FLI.
- What happens if I file payroll taxes late? Late filings can result in fines and interest on unpaid amounts. Automated systems can help you avoid missing deadlines.
Conclusion: Let TMD Accounting Help You Navigate Payroll Laws
Staying compliant with New Jersey’s payroll laws is a critical part of running a successful business. From understanding wage requirements to managing taxes and avoiding common mistakes, having the right tools and expert guidance can make all the difference. At TMD Accounting, we pride ourselves on making payroll easy and stress-free for South Jersey businesses.
Contact TMD Accounting today for a free consultation and discover how we can help simplify your payroll and accounting needs.