New Jersey Payroll Instructions

New Jersey has state income tax withholding. Withholding tax rates did not change in 2023. The NJ formulas have changed in 10 of the past 33 years. Withholding amounts are calculated with 'step' tax tables that are similar to the federal payroll withholding tables.

A top rate for millionaire earners was added in 2019, then removed in 2020, then reinstated retroactively in late 2020.

All New Jersey state tax packages also include the following state taxes:

New Jersey TDI Disability Insurance (paid by employers and employees)
Workforce Development Tax (paid by employers and employees)
FLI Family Leave Insurance (paid by employees)
SUTA contribution (paid by employers and employees)

HINT: TurtleSoft provides free annual updates for US federal and New Jersey tax withholding rates.

New Jersey State Withholding Instructions

To enter New Jersey withholding information for an employee in your Goldenseal company file, follow these steps:

Open the Payroll tab on the left, and choose Employees.
Locate the employee's record.
Click the Payroll Setup button.
Enter the employee's marital status into the Marital Status field (see note below).
Enter the number of federal dependents into the Federal Exemptions field.
Enter the number of New Jersey dependents into the State Exemptions field.
Enter a New Jersey Tax Package into the Tax Package field, based on the employee's W4 form. Choose Old W4 for pre-2020 forms. Choose New W4 Step2- if they did not check the box in step 2 of the new form. Choose Step2+ if they did check it. HINT: If you don't see New Jersey packages in the list, you'll need to import 2022 tax info first.
Click OK.

New Jersey State Unemployment Tax Instructions

In 2023, New Jersey state unemployment insurance tax is based on the first $41,100 of wages (up from the $39,800 cutoff used the previous year). The starting rate for a new employer is currently 2.9825%.

Unlike most states, there is also an employee SUTA contribution, plus a workforce development charge that is also paid by both employer and employee.

After the first year, the SUTA rate is different for each employer, depending on past layoff history.

To enter your New Jersey SUTA tax rate into Goldenseal payroll software, follow these steps:

Choose Payroll Setup from the Costs menu, and choose Tax Items.
You'll see a list of Tax Items. Open your state's SUTA and open it. HINT: If you don't see New Jersey SUTA in the list, you'll need to import your state's payroll info first.
Get the SUTA percentage rate for your business, and type it into the percentage field to the right of Calculation method.
If the SUTA cutoff amount has changed, enter it into the field to the right of First Adjustment.

Other New Jersey Taxes

New Jersey employers and employees both pay for disability insurance (DI) and workforce development (WF/SWF). Employees also pay a family leave insurance tax (FLI). Current rates are available here. Oddly, the employer portion changes on July 1 each year, but the employee amounts change on January 1.

In past years there was a Health Care subsidy charge of .2%. Starting in 2009, this employer tax is not in effect. We still list it as a Tax Item in case it returns some day, but currently the cost is 0%.

New Jersey Marital Status

Enter one of the following choices into the Marital Status popup field in each employee's account record:

Single- single employee (A rate)
Married- married filing jointly (B rate)
Dual Income- married filing separately (A rate)
Head of House- unmarried head of household (B rate)
Other- not used

If an employee chooses to withhold at the C, D or E rate (from line 3 of the NJ-W4 form), enter the matching tax package for them into the Tax Package field in the Employee account. In these cases, the Marital Status applies to the Federal taxes only. Otherwise use the regular state Tax Package.