Four deductions on every New Jersey payslip, and a city payroll tax

Most states fund unemployment insurance entirely from the employer and leave the employee's gross pay alone. New Jersey takes four bites out of it: unemployment insurance, the workforce development and supplemental workforce funds, temporary disability insurance and family leave insurance. All four are the employee's money, withheld by you, remitted by you, and printed on every payslip.

None of that is a cost to the business. It is, however, a conversation with every new hire about why their net pay is below the offer they did the mental arithmetic on — and four lines your payroll setup has to produce correctly from the very first run.

Alongside the employee's four, the business pays its own unemployment, disability and workforce contributions. The employer figures below are the new-employer rates for the fiscal year running July 2026 to June 2027; they become experience-rated once the account has a history.

Two taxable wage bases run underneath all of it for 2026: $44,800 for unemployment and $171,100 for temporary disability and family leave, per employee per year. So the unemployment deductions stop partway up a good salary while the disability and leave deductions keep going — which is why the four lines on a $200,000 payslip are not simply four times the lines on a $50,000 one.

The employer's own contributions on that $60,000 salary run several times the employee's $442, and it is the loaded figure rather than the bare wage that belongs in a runway model. One option worth knowing about: an employer may substitute an approved private plan for the state temporary disability or family leave programme. It is not a way of paying nothing, but for some employers a private plan prices better or administers more cleanly than the state fund.

Everything above comes off someone's pay. This does not. New Jersey has no general municipal income tax; what two cities have instead is an employer payroll tax — not a withholding, not the employee's money, but a levy on the business calculated from what it pays its people.

The trap is administrative rather than financial. Both taxes are filed with the city's own revenue office on the city's own schedule. Nothing in your state tax account knows they exist, no state notice mentions them, and a payroll provider configured for New Jersey generally is not configured for Newark specifically unless somebody tells it. Businesses tend to find out at audit, with interest attached.

New Jersey has no general licence to trade, but every business must file the NJ-REG with the Division of Revenue and Enterprise Services and hold the resulting Business Registration Certificate before doing business or hiring. It costs nothing.

Which is exactly why it gets skipped — free things generate no invoice, and an invoice is what most people's process is built around. The certificate matters in one concrete way: you must be able to produce it to contract with any New Jersey state or local government body, or with their contractors. If public-sector work is ever going to be part of your revenue, discovering the gap partway through a procurement is an expensive way to learn about it.

The NJ-REG is also how you register for sales tax and for employer withholding, so in practice it is the one filing that opens all your state tax accounts at once. Do it in the same week you form the entity. Formation itself is $100 — cut from $125 in July 2026 — with a $75 annual report due at the end of your anniversary month, or $400 across five years, and the fees for every state sit on the LLC hub.

Every New Jersey employer not covered by a federal programme must carry workers' compensation or be approved to self-insure, from the first employee, with no headcount threshold. The structural quirk is who counts.

A corporation must insure if any one or more individuals — corporate officers included — perform services for it. So a one-person corporation whose only worker is its own officer still needs a policy, which surprises founders who reasoned that they cannot be their own employee. Partners and LLC members are excluded from the count, so a single-member LLC with no staff is in a different position from a single-shareholder corporation doing identical work at the same desk.

The penalties are the reason to settle this rather than argue about it: up to $5,000 for the first ten days and $5,000 for each further ten-day period, a disorderly persons offence — a fourth-degree crime if the failure was wilful — personal liability for officers, and penalties that are not dischargeable in bankruptcy. That last clause is unusual, and it means the exposure follows the individual rather than the company.

After five sections of money coming off, something going the other way. Sales tax is the simple part here: 6.625% statewide with no county or city add-on anywhere — one rate, one lookup, one return, whatever address you sell from or ship to inside the state.

And the one variation is an advantage rather than a complication. A retailer certified in an Urban Enterprise Zone charges customers half the normal rate — 3.3125% — on many purchases, and can buy items and services for the business itself without sales tax. Certification runs through Premier Business Services, requires an annual report and must be renewed every three years. For a shop competing with neighbours across a river, half the sales tax is a real line in an advertisement, and no neighbouring state offers anything resembling it.