New Jersey has a progressive income tax from 1.4% to 10.75%. Most earners under $500k pay an effective NJ rate well below the headline number. See your exact take-home pay.
New Jersey's top 10.75% rate only applies to income above $1,000,000. A single filer earning $75,000 has an effective NJ state tax rate of about 3.5% — lower than many flat-tax states. NJ has no standard deduction, only a $1,000 personal exemption for single filers. New Jersey also does not tax most Social Security benefits or pension income, making it more favorable for retirees than the headline rate suggests.
New Jersey's 10.75% top rate gets all the attention, but the number that matters for most workers is the effective rate — and for the majority of New Jerseyans, it's well under 5%. A single filer earning $75,000 pays an effective NJ state rate of roughly 3.5%. The top bracket only applies to income above $1,000,000.
NJ has more paycheck deductions than most states. Beyond income tax, New Jersey workers see additional withholding items that workers in other states don't: State Disability Insurance (SDI, 0.14%), Unemployment Insurance (UI, 0.425%), Workers' Compensation (small fixed amount), and Family Leave Insurance (FLI, 0.09%). These are relatively small individually, but combined they add up to roughly 0.66% of your gross wages on top of income tax — something to account for when budgeting from a gross salary offer.
NJ residents who commute to New York City face a complicated situation. New York taxes income earned in New York regardless of where you live — so a New Jersey resident working in Manhattan owes NY state income tax on those wages. New Jersey gives a credit for taxes paid to other states, which prevents true double taxation, but the process matters: your effective tax burden ends up being whichever state rate is higher (NY for most mid-to-high earners), not the sum of both. This is one reason many NJ residents working in NYC see larger-than-expected tax bills.
New Jersey does not tax Social Security benefits or most pension income, and provides a retirement income exclusion of up to $100,000 for joint filers over 62 (income limits apply). Despite its reputation as a high-tax state, moderate-income retirees who stay in New Jersey often find their actual state tax burden is lower than they expect.
| Income (Single) | Income (Married) | Rate |
|---|---|---|
| $0 – $20,000 | $0 – $20,000 | 1.400% |
| $20,001 – $35,000 | $20,001 – $50,000 | 1.750% |
| $35,001 – $40,000 | $50,001 – $70,000 | 2.450% / 3.500% |
| $40,001 – $75,000 | $80,001 – $150,000 | 5.525% |
| $75,001 – $500,000 | $150,001 – $500,000 | 6.370% |
| $500,001 – $1,000,000 | $500,001 – $1,000,000 | 8.970% |
| Over $1,000,000 | Over $1,000,000 | 10.750% |
Personal exemption: $1,000 (single) · $2,000 (married) · $1,500 (head of household). No standard deduction.
Estimates only. NJ progressive brackets 1.4%–10.75%. Personal exemption: $1,000 (single) / $2,000 (married). No NJ standard deduction. Consult a tax professional for advice.
| Gross Pay (this check) | $0.00 |
| Federal Income Tax | −$0.00 |
| New Jersey State Tax | −$0.00 |
| Social Security (6.2%) | −$0.00 |
| Medicare (1.45%) | −$0.00 |
| Net Take-Home Pay | $0.00 |
New Jersey has a progressive income tax with seven brackets ranging from 1.4% to 10.75% for 2026. The rate you pay depends on your taxable income. Most workers earning $40,000–$500,000 fall into the 5.525% or 6.37% brackets. The feared 10.75% rate only applies to income exceeding $1,000,000.
Four taxes come out of a New Jersey paycheck: federal income tax (progressive, based on your W-4), New Jersey state income tax (1.4%–10.75% progressive), Social Security (6.2% up to $184,500), and Medicare (1.45% on all wages). Unlike Pennsylvania, NJ has no statewide local income tax — Newark and other cities do not add a local income tax on employees.
No. New Jersey does not have a standard deduction. The only reduction to your NJ taxable income is a personal exemption — $1,000 for single filers, $2,000 for married filing jointly, and $1,500 for head of household. This is much smaller than the federal standard deduction ($16,100 for single filers), meaning NJ taxes a larger share of your gross income than federal does.
A single filer earning $75,000 in New Jersey has NJ taxable income of $74,000 (after the $1,000 exemption). The top marginal bracket is 6.37% (income from $75,001–$500,000), but the effective NJ rate works out to about 3.5% of gross income because the lower brackets (1.4%, 1.75%, 3.5%, 5.525%) apply to the first $75,000. That's roughly $2,600 in NJ state tax per year.
New Jersey and New York have comparable top marginal rates (NJ 10.75%, NY 10.9%), but NJ's middle brackets are somewhat more favorable. A single earner at $75,000 pays roughly $2,600 in NJ state tax versus $3,900 in New York state tax. However, most NY-area NJ residents who commute to NYC also owe NYC local income tax (up to 3.876%), which can erase NJ's advantage entirely for city workers.
New Jersey has a partial retirement income exclusion. NJ does not tax Social Security benefits. For pension and retirement account income, NJ allows an exclusion of up to $75,000 for single filers (or $100,000 for married filing jointly) if your total income is under $100,000. Above that threshold, the exclusion phases out. Retirees with modest incomes can pay very little NJ state tax.
No. New Jersey does not have a local income tax on employees. Newark and other cities may have various business taxes, but individual workers do not pay a local income tax in NJ. This contrasts with neighboring Pennsylvania, where most municipalities levy a local Earned Income Tax of 1–2%, and New York, where NYC residents pay an additional 3.078%–3.876% city income tax.
Traditional 401(k) contributions reduce your federal taxable income, and they also reduce your New Jersey taxable income. Unlike Pennsylvania, NJ does allow the 401(k) pre-tax deduction for state purposes. Contributing $10,000 to a 401(k) saves you roughly $553–$637 in NJ state tax depending on your bracket, on top of the federal savings. NJ does tax 401(k) distributions in retirement (unlike PA, which exempts them).