New Jersey payroll taxes and filings for small employers

Register as an employer

Before you pay wages, get an EIN from the IRS and register with the State of New Jersey as an employer for withholding and unemployment and disability insurance contributions. Keep the account numbers where your payroll service can use them.

What comes out and what you add

From each paycheck you withhold federal income tax, Social Security and Medicare, and New Jersey income tax and certain state payroll contributions. As the employer, you also pay your share of Social Security and Medicare, federal and state unemployment taxes, and employer-side state contributions. The exact set depends on your business.

The reports

Employers typically file a federal quarterly return (Form 941) and an annual federal unemployment return (Form 940), and file New Jersey quarterly returns and wage reports. At year end you provide Forms W-2 to employees and file them with the government. A payroll service can prepare and file these, and you remain responsible for accuracy.

Deposits

Withheld taxes are deposited on a schedule that depends on how much you owe. Missed or late deposits are penalized. Set them up as automatic payments through your payroll service.

How payroll fits in your books

Each payroll records gross wages as an expense, employer taxes as an expense, and amounts withheld as liabilities until paid. Reconcile the payroll liability accounts every quarter against your tax filings. When the numbers do not tie out, something is wrong.

Common mistakes

Paying workers as contractors who should be employees. Paying yourself as an owner without understanding what your entity type allows. Forgetting NJ filings because the federal ones were automatic. Using personal funds for tax deposits.

Common questions

This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.