New Jersey Paycheck Calculator & Income Tax Rates (2026)

New Jersey applies 7 rates to taxable income — that is, income after the state standard deduction or exemption. Only the slice of income inside each band is taxed at that band's rate.

New Jersey's effective state rate climbs with income as more of your salary lands in higher bands. The last column shows the state rate on your next dollar at each level.

New Jersey's joint brackets widen the bands for couples, so the same household income is taxed more lightly. On $100,000 a joint return keeps $82,071 versus $74,945 for a single filer.

New Jersey's gross income tax runs through seven brackets for single filers and eight for joint filers, from 1.4% on the first dollars to 10.75% on income above $1 million. The top rate arrived in 2018 for incomes above $5 million and was pulled down to $1 million in 2020, making New Jersey one of only four states with a top rate above 10.5%, with an 8.97% bracket sitting just below it. Nothing in the schedule changes for 2026, and the brackets have never been indexed for inflation, so thresholds set in the 1990s now catch far more middle-income filers than they were designed to. The structure is unusual in both directions. At the bottom it is among the gentlest in the Northeast: the lowest bracket pays 1.4%, and filers with gross income under $10,000 ($20,000 joint) owe nothing. But the base is broad. New Jersey allows no standard deduction, no deduction for federal taxes, no charitable deduction, and no netting of losses across income categories—a capital loss cannot offset wages.

There is no standard deduction. Every filer gets a $1,000 personal exemption—$1,500 per dependent, an extra $1,000 at 65 or older, $6,000 for veterans—plus a short list of deductions: property taxes paid, up to $15,000, or a $50 credit; and medical expenses above 2% of gross income. Credits carry the weight: an earned income credit at 40% of the federal amount, a child tax credit of up to $1,000 per child under six for income up to $80,000, and a dependent care credit.

No New Jersey municipality taxes employee wages or personal income. Newark and Jersey City each levy a 1% payroll tax, but it is paid by employers on their total payroll, not withheld from workers. The local tax that matters is across the Hudson: residents who work in New York pay New York's nonresident income tax and claim a credit on the NJ-1040, which usually wipes out the New Jersey liability on those wages because New York's rates are higher.

The state sales tax is 6.625%, cut in two steps from 7% in 2017 and 2018, and there is no general local sales tax—the rate is the same in Newark, Cherry Hill and Cape May. Two carve-outs halve it: designated Urban Enterprise Zones and all of Salem County charge 3.3125%. Groceries, clothing and footwear, prescription and over-the-counter drugs and household paper products are exempt, a broader exemption list than New York's, which caps its clothing break at $110.

New Jersey has the highest property taxes in the nation: effective rates average around 2.2% of market value, and the average residential bill passed $10,000 in 2024. ANCHOR pays homeowners up to $1,500 (income under $150,000) and renters $450; the Senior Freeze reimburses tax increases for qualifying homeowners 65 and older; and Stay NJ, paying its first benefits in 2026, covers half the bill up to $6,500 for seniors with income under $500,000.

Social Security is fully exempt, and so is military retirement pay, including survivor benefits. Beyond that, the retirement income exclusion does the heavy lifting: taxpayers 62 and older (or disabled) with total income of $100,000 or less can exclude up to $100,000 of pension, annuity, IRA and 401(k) income on a joint return, $75,000 single, $50,000 married filing separately. The exclusion shrinks to half and then a quarter as income rises through $125,000 and $150,000, and disappears above $150,000—a cliff, not a phase-out, so one extra dollar can cost thousands. Because New Jersey never allowed deductions for IRA, 403(b) or 457 contributions (only 401(k) deferrals), part of every withdrawal from those accounts is a tax-free return of money already taxed.

Middle-income households do better than New Jersey's reputation suggests: a single filer at $60,000 pays an effective rate near 3%, less than Pennsylvania's flat tax plus a local wage tax. The pain arrives in the 6.37% bracket and above. Retirees under $150,000 are the clearest winners, with pensions and IRA withdrawals largely untaxed. Homeowners pay for it in property tax. Joint brackets are wider lower down, but the 8.97% and 10.75% thresholds are identical for both statuses—a marriage penalty at the top. Remote employees of New York companies face New York's convenience rule, which New Jersey mirrored in 2023.

The median household income in New Jersey is $82,000, which is $63,429 a year ($5,286 a month) after all taxes. That is above the national median, reflecting New Jersey's higher cost of living and correspondingly higher wages. After adjusting for cost of living, the purchasing power of that take-home is equivalent to $55,155 in an average-cost area.

New Jersey ranks #29 of 50 for raw take-home pay and #43 for cost-adjusted purchasing power at $100,000. The 14-place gap between the two reflects an above-average cost of living that erodes what the take-home actually buys. The best state (Alaska) leaves $79,125; the worst (Oregon) leaves $70,932. New Jersey is $4,180 behind the leader.

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