Payroll & Benefits Guide
New Jersey
USD
Semi-monthly / monthly
1 Jan - 31 Dec
12.05% – 23.90%
9.255%
mm/dd/yyyy
Contributions
Employer
Employer Payroll Contributions
0.60% – 6.40% (Max taxable wages is 41,100.00 USD) (Includes workforce dev/supplemental workforce) | Unemployment Insurance (State) |
3.10% (Standard 2.6825%-UI + 0.1175% – workforce dev/supplemental workforce) (Voluntary Contribution not permitted) | Unemployment- New Employer (State) |
0.10% – 0.75% (max taxable wages is 41,100 USD) | Disability Insurance (State) |
6.20% (Maximum taxable wages is 160,200 USD) | FICA Social Security (Federal) |
1.45% | FICA Medicare (Federal) |
0.60% -6.00% (Maximum taxable wages is 7,000 USD) | FUTA (Federal Unemployment Tax Act) The FUTA tax rate is 6.0% with a taxable wage base of 7,000 USD. However, if states operate their unemployment insurance programs in compliance with federal law then the FUTA tax is reduced (credit) by 5.4% to 0.6%. |
12.05% – 23.90% | Total Employment Cost |
Employee
Employee Payroll Contributions
0.425% (0.3825%-UI + 0.0425% – workforce dev/supplemental workforce) (Max taxable wages is 41,100.00 USD | New Unemployment Insurance |
0.14% (max taxable wages is 156,800.00 USD) | Disability Insurance (State) |
0.14% | Family Leave Insurance (State) |
6.20% (Maximum taxable wages is 160,200.00 USD) | FICA Social Security (Federal) |
1.45% | FICA Medicare (Federal) |
0.90% | Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.9 percent in Medicare taxes) |
9.255% |
Total Employee Cost |
Employee
Employee Income Tax
State Tax – Single | |
1.40% | 0 USD to 20,000 USD |
1.75% | 20,000 USD to 35,000 USD |
3.50% | 35,000 USD to 40,000 USD |
5.53% | 40,000 USD to 75,000 USD |
6.37% | 75,000 USD to 500,000 USD |
8.97% | 500,000 USD to 5,000,000 USD |
10.75% | over 5,000,000 USD |
Married taxpayers filing jointly | |
1.40% | 0 USD to 20,000 USD |
1.75% | 20,000 USD to 50,000 USD |
3.50% | 50,000 USD to 70,000 USD |
5.53% | 70,000 USD to 80,000 USD |
6.37% | 80,000 USD to 150,000 USD |
8.97% | 150,000 USD to 5,000,000 USD |
10.75% | over 5,000,000 USD |
Federal Employee Income Tax | |
Federal Tax – Singles | |
10.00% | Up to 11,000 USD |
12.00% | 11,001 USD to 44,725 USD |
22.00% | 44,726 USD to 95,375 USD |
24.00% | 95,376 USD to 182,100 USD |
32.00% | 182,101 USD to 231.250 USD |
35.00% | 231,251 USD to 578,125 USD |
37.00% | 578,126 USD or more |
Federal Tax – Married, filing jointly | |
10.00% | Up to 22,000 USD |
12.00% | 22,001 USD to 89,450 USD |
22.00% | 89,451 USD to 190,750 USD |
24.00% | 190,751 USD to 364,200 USD |
32.00% | 364,201 USD to 462,500 USD |
35.00% | 462,501 USD to 693,750 USD |
37.00% | 693,751 USD or more |
Federal Tax – Heads of Households | |
10.00% | Up to 15,700 USD |
12.00% | 15,701 USD to 59,850 USD |
22.00% | 59,851 USD to 95,350 USD |
24.00% | 95,351 USD to 182,100 USD |
32.00% | 182,101 USD to 231,250 USD |
35.00% | 231,251 USD to 578,100 USD |
37.00% | 578,101 USD or more |
Standard Deduction and Personal Exemption | |
13,850.00 USD | Single |
27,700.00 USD | Married Filing Jointly |
20,800.00 USD | Head of Household |
Minimum Wage
General
New Jersey upholds a state Minimum Wage Law, a minimum pay of $14.13 per hour worked.
Payroll
Payroll Cycle
Employees in New Jersey typically receive their pay on a semi-monthly or monthly basis, following the schedule outlined in their employment agreement.13th Salary
New Jersey does not have any specific laws or regulations regarding 13th-month payments.
Working Hours
General
In New Jersey, employees are expected to work a maximum of 40 hours per week, with a daily limit of 8 hours.
Overtime
In accordance with the Fair Labor Standards Act (FLSA), New Jersey follows the guidelines for overtime pay. If employees work more than 40 hours in a single week, they are eligible for overtime compensation. The employer must provide 150% of the regular salary rate for the additional hours worked. Furthermore, if employees are required to work on weekends or rest days, no extra payment is necessary.
If an employer requires an employee to work under extraordinary circumstances on weekends or rest days, they will be compensated for the additional hours worked at a rate of 150% of their regular salary.
Working Week
Monday-Friday
Leave
Paid Time Off
There is no specific state law in New Jersey regarding the regulation of vacation time, including the amount and payment. However, it is typically left to the discretion of employers to determine whether to provide paid or unpaid vacation leave. It is important for employers to comply with employment laws and include any vacation policies in collective bargaining agreements.
Public Holidays
Although there are 11 official holidays in New Jersey, private employers are not obligated to grant time off or provide overtime pay for these days.
Sick Days
In New Jersey, employees are entitled to receive one hour of paid sick leave for every 30 hours worked, with a maximum of 40 hours of paid sick leave per year.
Many employers choose to adhere to the Family and Medical Leave Act (FMLA), which grants eligible employees the opportunity to take up to 12 weeks of unpaid and job-protected leave each year for various family and medical circumstances. These circumstances may include maternity leave, serious illnesses, or the need to care for a spouse or child.
To qualify for FMLA benefits, employees must meet certain criteria. They must have been employed with their current employer for a minimum of one year, worked a minimum of 1,250 hours within the past year, and be employed at a location where the company has at least 50 employees within a 75-mile radius. These requirements ensure that eligible employees can take advantage of the Family and Medical Leave Act provisions.
In addition to the FMLA, New Jersey has the New Jersey Family Leave Act, which provides employees with valuable benefits. After the recovery period, eligible employees can take advantage of up to 6 weeks of leave, with the option to extend it to 12 weeks within a 24-month period. This generous program is designed to support employees during important life events and ensure their well-being.
- Companies employing 50 or more individuals
- Employees who have accumulated 100 working hours within the past 12 months
- And employees who are responsible for the well-being of a child within the first year of their birth, adoption, placement in foster care, or the care of a family member.
Maternity Leave
The Family and Medical Leave Act (FMLA), which can be found under the sick leave section above, offers eligible employees the opportunity to take up to 12 weeks of unpaid leave per year, ensuring job protection during specific family and medical circumstances such as maternity leave, serious illnesses, or the need to care for a spouse or child. The FMLA guarantees:
- Employees are entitled to take a total of twelve weeks off within a year for the purpose of welcoming a new child into their family and providing care for the newborn during the first year of their life.
- Employees may be eligible for leave when adopting or providing foster care for a child, as well as for the care of the newly placed child within the first year of placement.
New Jersey residents also have the advantage of the Temporary Disability Insurance (TDI) Program, offering employees who are temporarily unable to work due to pregnancy or childbirth-related disabilities up to ten weeks of paid leave, receiving two-thirds of their regular salary. This program allows the employee to take up to four weeks of leave before the birth and an additional six weeks after, ensuring they have the necessary time to recover and care for their newborn.
Paternity Leave
The Family and Medical Leave Act (FMLA), mentioned in the sick leave section above, grants eligible employees the opportunity to take up to 12 weeks of unpaid leave per year, ensuring job protection for specific family and medical circumstances such as maternity leave, serious illnesses, or the need to care for a spouse or child. The FMLA offers the following benefits:
- Employees are entitled to take a total of twelve weeks off within a year for the purpose of celebrating the arrival of a new child into their family and providing care for the newborn during the first year of their life.
- Employees may be eligible for leave if they choose to adopt or provide foster care for a child and need to care for the child within the first year of placement.
Parental Leave
The Family and Medical Leave Act (FMLA), mentioned in the section on sick leave, offers eligible employees the opportunity to take up to 12 weeks of unpaid leave per year, ensuring job protection for specific family and medical circumstances such as maternity leave, serious illnesses, or the need to care for a spouse or child. This important provision allows employees to prioritize their family's well-being without fear of losing their job or income. The FMLA provides:
- To provide support and assistance to the employee's spouse, child, or parent who is facing a significant health challenge.
- A severe medical condition that renders the employee incapable of fulfilling the fundamental responsibilities of their position.
- any urgent and necessary situation that arises from the fact that the employee's spouse, son, daughter, or parent is serving as a military member on "active duty."
OR
- Employees who are eligible and have a family member serving as a covered servicemember with a serious injury or illness can take up to twenty-six weeks of leave within a one-year period to provide care. This leave, known as military caregiver leave, is available to the service member's spouse, son, daughter, parent, or next of kin.
Under the New Jersey Family Leave Act, eligible employees are entitled to receive benefits for a period of up to 6 weeks following the recovery period. This benefit can be extended to 12 weeks within a 24-month period for specific employees who meet the following criteria: employers with 50 or more employees, employees who have worked at least 100 hours in the past 12 months, and employees who need to care for a child within a year of birth, adoption, foster care, or the care of a family member.
- Companies employing a workforce of 50 or more individuals
- Employees who have accumulated a minimum of 100 working hours within the past 12 months
- And employees who have the responsibility of providing care for a child within the first year of their birth, adoption, placement in foster care, or the care of a family member.
Other Leave
Under New Jersey law, employers are obligated to grant job-protected leave to their full-time employees for jury duty, acting as a witness, responding to a subpoena, or serving as a plaintiff or defendant in court. This leave is unpaid but ensures that employees can fulfill their legal obligations. To avail this leave, employees must provide their employer with a copy of the jury summons or other relevant documentation.
In New Jersey, employees who are members of the U.S. armed forces, reserves, National Guard, commissioned corps of the Public Health Service, and any other category of persons designated by the president during times of war or emergency are protected against discrimination under state law.
Termination
Termination Process
In the absence of mass dismissals or specific provisions in an employment contract or a collective bargaining agreement, termination of an individual employment relationship in the United States does not require a formal "notice period." Employment is typically based on the principle of "at-will," allowing for flexibility in ending the working arrangement.
This allows either the employer or the employee to terminate the employment relationship without the need for notice or explanation, as long as it is not illegal or discriminates against a protected category under the law. This is in accordance with the Federal Worker Adjustment and Retraining Notification Act (WARN) and ensures flexibility in ending the working arrangement.
Employment agreements for top-level executives and highly skilled professionals commonly include a provision known as a "just cause termination" clause. This clause specifies that an employer can only terminate an employee if there is a valid reason, and it outlines the acceptable grounds for termination. In these situations, the parties involved negotiate the specific criteria for a "just cause" termination on a case-by-case basis.
Notice Period
In New Jersey, the employment relationship is typically "at-will," meaning that both the employer and the employee have the right to terminate the relationship without any notice. However, it is important to note that there is no legal requirement for employers to pay out unused vacation time. Nevertheless, it is common practice for employers to compensate employees for any unused vacation days, particularly if the employee provides advanced notice of their resignation. While there is no official notice period, it is generally expected for employees to provide a minimum of two weeks' notice.
In situations where there are mass layoffs, employers are required to adhere to the Worker Adjustment and Retraining Notification Act (WARN Act), which mandates that they provide a 60-day notice to employees who will be affected by the dismissals.
Severance Pay
Employers are not obligated to provide severance payments to terminated employees, unless it is specified in their employment contract or collective bargaining agreement. However, some employers may choose to offer severance based on the employee's length of service, with the specific provisions outlined in the contract and agreed upon by both parties. In New Jersey, it is common for employers to offer one week's pay for every year of service as a severance package.
Probation Period
There is no specific legal requirement for a formal "trial/probation period." However, it is customary for employers to conduct a performance evaluation after an initial period of employment, typically lasting 90 days. This evaluation allows both the employer and the employee to assess the fit and performance in the role.
VISA
VISA
Foreign individuals who do not possess permanent resident status or a valid work visa are prohibited from working in the United States. However, employers have the option to submit a petition on behalf of a prospective foreign employee to the United States Department of Homeland Security/ United States Citizenship and Immigration Services (USCIS) in order to obtain an employment visa. This visa allows the foreign national to legally work in the United States.
Once the petition is given the green light, the aspiring employee will need to obtain a "visa stamp" from a United States embassy or consulate (except for Canadian citizens). To secure a temporary work visa in the United States, the employer must submit a petition to the U.S. Citizenship and Immigration Services (USCIS). This approved petition is an essential part of the visa application process, which offers various types of visas to choose from.
- The H-1B visa is designed for highly skilled individuals with a college degree who are hired to perform specialized work. This visa allows them to legally work in the United States for a period of three years, with the option to extend it for an additional three years. The visa is tied to the employer who sponsored the petition, so if there is a change of employer, the new employer must go through the process again. Each year, there are 65,000 H-1B visas available, offering ample opportunities for qualified applicants.
- H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
- H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
- H-2B visas are specifically designed for individuals seeking temporary non-agricultural work opportunities. These visas are available to citizens of qualified countries and typically have a validity of up to one year, with the possibility of extension for a maximum of three years.
- L – for intracompany transfers (individuals relocating from a foreign company to a US branch). The applicant must have a minimum of one year of employment with the company before the transfer and must hold a managerial position or higher with specialized knowledge.
- 0 – for individuals with exceptional talent in fields such as science, arts, education, business, or athletics, showcasing their extraordinary abilities and skills.
Typically, individuals follow a standard procedure of acquiring a temporary work visa and subsequently applying for an immigrant visa once they have commenced working in the United States.
If you are looking to obtain a visa based on employment, we have you covered. Our team is experienced in assisting individuals who are seeking employment-based immigrant visas.
- E-1 – This category is reserved for individuals who possess exceptional talents and abilities in the fields of science, arts, education, business, and athletics, and are given the highest priority for employment opportunities.
- E-2 – for those with advanced degrees or exceptional ability.
- E-3 – for skilled workers and professionals, as well as unskilled workers.
- E-4 – Members of certain immigrant groups.
- E-5 – Immigrant investors in US companies (substantial investment)
Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States. The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.
All employers are obligated to verify that all individuals they employ are authorised to work in the United States.
VAT
General
New Jersey has a minimum combined Sales Tax Rate of 6.63% (State tax at 6.6% and Local tax at 0.03% USD)
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