what is nj sui tax?
Worker
Worker - Governmental Reimbursable Employer
U.I. - Unemployment InsuranceD.I. - Disability InsuranceW.F./S.W.F. - Workforce Development/Supplemental Workforce FundsF.L.I -Family Leave Insurance
For calendar year 2023, the maximum unemployment insurance, temporary disability insurance and workers' compensation benefit rates, the alternative earnings and base week amounts, and the taxable wage base are listed below.
In accordance with N.J.A.C. 12:16-4.8, the following are the calculated dollar equivalents for board and room, meals and lodging furnished by employers in lieu of money wages paid for services rendered by employees during the calendar year 2023:
State unemployment insurance (SUI) is a tax-funded program by employers to give short-term benefits to workers who have lost their job. This tax is required by state and federal law. Unemployed workers receive these benefits on the condition that they're looking for a new job.
In order to calculate payroll taxes accurately and effectively for your company and employees next year, it is important to understand the new and existing compliance requirements in effect for 2023. Below is an overview of the tax rates, taxable wage bases, and other updates impacting your payroll processes when January 1 arrives.
Federal Insurance Contributions Act (FICA)
The wage base will increase from $147,000 to $160,200. Under current law, the tax rate will remain the same at the rate of 6.2%, to be paid by both the employer and the employee. The maximum tax will increase from $9,114.00 to $9,932.40.
Medicare
There is no wage base for Medicare. The tax rate is 1.45% to be withheld from the employee and 1.45% to be paid by the employer.
Additional Medicare Tax
An additional Medicare tax is payable over various threshold amounts depending on the filing status reported on the taxpayer’s personal income tax return. This is a withholding tax withheld from the employee only and carries no tax requirement for the employer. For payroll tax purposes, the only relevant item is wages, including taxable benefits paid.
This additional Medicare tax should be deducted from the employee, at the rate of 0.9%, for all wages (and taxable benefits) paid in excess of $200,000.
Federal Unemployment Tax
The current gross FUTA tax rate is 6.0% of taxable wages, to be paid by the employer only. However, an allowed credit effectively reduces the tax rate to a net of 0.6% for wages paid up to the wage limit of $7,000 (for the majority of states). The credit and reduced rate are available by filing Form 940 for 2022.
In New Jersey, where no credit reduction exists, the effective FUTA tax rate is 0.6% for 2022. There is a credit reduction in California, Connecticut, and Illinois, and New York, resulting in an effective FUTA tax rate of 0.9% for 2022. For more information on state-specific credit reductions, refer to the Schedule A of Form 940, which will indicate the previously mentioned states subject to credit reduction for the 2022 filing.
NJ Unemployment and Disability
For 2023, the employer base for unemployment and disability will increase from $39,800 to $41,100. The employer rate for these taxes is determined by the State and sent in a notice in July. The unemployment base for the employee will increase from $39,800 to $41,100 while the rate will remain the same at .425%. The maximum tax will increase from $169.15 to $174.68.
The base for disability for the employee will increase from $151,900 to $156,800, and the tax rate will decrease from .14% to .0%. This will reduce the maximum tax from $212.66 to $0.00.
NJ Family Leave Insurance
The wage base and rate will both change in 2023. The wage base for the employee will increase from $151,900 to $156,800, and the tax rate will decrease from .14% to .06%. This will reduce the maximum tax from $212.66 to $94.08.
NJ Payroll Tax Payments
As a reminder, New Jersey will only accept payroll tax payments using an online payment method. There will no longer be an option to call in the tax payments.
NY Unemployment Compensation
The maximum wages subject to the New York unemployment tax will increase from $12,000 to $12,300 in 2023.
Minimum Wage
There will be changes to the minimum wage in many states in 2023. Locally, the New Jersey minimum wage will increase from $11.90 to $12.93 for under five employees, and for six or more employees, it will increase to $14.13.
New York will continue to mandate different minimum wages depending on the location and type of work.
The Connecticut minimum wage increased to $14.00 on July 1, 2022, and will change to $15.00 on July 1, 2023.
Please review your specific state’s requirements to determine your minimum wage responsibilities.
NJ Paid Sick Leave
New Jersey requires businesses to provide paid sick time to employees. Make sure to follow up on the specific requirements. Please reference Sax’s “New Jersey Paid Sick Leave Update” alert for more information.
PEO (Professional Employer Organization)
If your company uses a PEO, ensure that the organization has received the IRS PEO Certification. This will relieve your company of withholding tax responsibility.
NJ Sales Tax
The NJ Sales Tax rate remains at 6.625% in 2023. Be sure to review your records and any computer programs that use this information.
Newark Payroll Tax
The Newark payroll tax rate is 1% of wages for services performed within Newark, for services supervised from Newark, and for wages of employees who principally report to a location in Newark. No tax is due if the total wages are less than $2,500 per quarter. The Newark payroll tax return is due quarterly with the appropriate payment.
Jersey City Payroll Tax
The Jersey City payroll tax rate is 1% of wages for services performed within Jersey City and those performed outside Jersey City but supervised within Jersey City. Employees living within Jersey City are excluded. No tax is due if the total wages are less than $2,500 per quarter. The Jersey City payroll tax return is due quarterly with the appropriated payment.
NY MTA Payroll Tax
There is a tax on wages for employees who work within the MTA district in NY. This tax is on a graduated rate from .11% to .34%. If the total wages for the quarter do not exceed $312,500, there is no tax liability.
Form I-9 (Employment Eligibility Verification – Department of Homeland Security – US Citizenship and Immigration Service)
A new version of this form was issued on October 21, 2019. The changes are designed to simplify the process of completing the form and to streamline the certification process.
Withholding Update
The IRS released a new W-4, Employee’s Withholding Allowance Certificate, for 2020. New employees are required to complete the new W-4 while existing employees can continue to have the W-4 on file with the employer or complete a new form.
Supplemental Wages
Different methods must be used to determine withholding taxes if a supplemental wage payment is made separately from base wages. If the supplemental wage payment is under $1 million, for withholding taxes:
Backup Withholding Rate
For any payments subject to backup withholding, the rate is 24%
SUI tax rates are part of the payroll taxes you are responsible for paying as a small business owner. SUI, which stands for State Unemployment Insurance, is an employer-funded tax that offers short-term benefits to employees who lost their jobs through a layoff or a firing that is not misconduct related. As with many things payroll and taxes, SUI tax rates vary by state, and we have the most current rate ranges below. In addition to varying by state, SUI tax rates can also be impacted by factors like how many people have applied for unemployment benefits after leaving your business. Below you’ll find more information on what SUI is, and the rates for your state.
If you follow a DIY payroll method, you’ll need to understand how to calculate SUI taxes. Similar to FUTA taxes, there is a wage base you are required to follow when paying SUI taxes. For example, if your state mandates a wage base of $11,000, it means you are responsible for paying SUI taxes up to that $11,000; any wages an employee earns after that is exempt from SUI taxes. Also similar to FUTA, most states have SUI taxes as an employer only tax, meaning employees are not required to pay these taxes.
The more employees you have filing for unemployment, the higher your SUI tax rate can be. Unless an employee is let go because of misconduct, it’s fairly easy for them to receive unemployment benefits if they were let go due to poor performance or the inability to perform on the job. As a small business owner, you already know that documentation is important for many reasons, and the same applies to protecting your SUI rate. If you fire an employee for misconduct, and they try to receive unemployment benefits, you’ll need to be prepared to show why they were terminated. First, it’s good practice to have an employee handbook. Even if you only employ a handful of employees, an employee handbook will provide helpful information and let your employees know what you expect in the workplace. Next, if you are struggling with an employee’s performance, keep track of it, give them notice and document the conversations. All of this can help your case if you need it later. After letting an employee go, make sure that you are on top of any unemployment communications that turn up in your path. Failing to recognize these communications can automatically award your former employee unemployment benefits.
If calculating payroll taxes on your own is too overwhelming, an accountant or online payroll provider can help you remain compliant. If you want to proceed with a DIY approach, below you’ll find the information you need to know for your state.
SUI Tax Rate: 0.14% - 5.4%
SUI Tax Rate: 1.00% - 5.4%
SUI Tax Rate: 0.07% - 18.78%
SUI Tax Rate: 0.3% - 14.2%
SUI Tax Rate: 1.5% - 6.2%
SUI Tax Rate: 0.75% - 10.39%
SUI Tax Rate: 1.7% - 6.6%
SUI Tax Rate: 0.3% - 5.6%
SUI Tax Rate: 1.6% - 7.0%
SUI Tax Rate: 0.1% - 5.4%
SUI Tax Rate: 0.06% - 8.10%
SUI Tax Rate: 1.20% - 6.20%
SUI Tax Rate: 0.207% - 5.4%
SUI Tax Rate: 0.850% - 8.650%
SUI Tax Rate: 0.5% - 7.4% (up to 9.4% for successor employers)
SUI Tax Rate: 0.0% - 7.5%
SUI Tax Rate: 0.17% - 6.40%
SUI Tax Rate: 0.225% - 8.925% (0.3% - 0.9% with SCUF)
SUI Tax Rate: 0.09% - 6.2%
SUI Tax Rate: 0.00% - 5.47%
SUI Tax Rate: 1.0% - 10.5%
SUI Tax Rate: .56% - 8.62%
SUI Tax Rate: .06% - 10.3%
SUI Tax Rate: 0.1% - 9.1%
SUI Tax Rate: 0.2% - 5.60% (Q1 2023 rates still TBD)
SUI Tax Rate: 0.0% - 10.5%
SUI Tax Rates: 0.0% - 6.12%
SUI Tax Rate: 0.0% - 5.4%
SUI Rate Tax: 0.25% - 5.4%
SUI Tax Rate: 0.1% - 8.5%
SUI Tax Rate: 0.6% - 6.4%
SUI Tax Rate: 0.33% - 5.4%
SUI Tax Rate: 2.1% - 9.9%
SUI Tax Rate: 0.06% - 5.76%
SUI Tax Rate:0.08% - 9.97%
SUI Tax Rate: 0.3% - 9.8% (there is a delinquency rate of 12.9%)
SUI Tax Rate: 0.3% - 9.2%
SUI Tax Rate: 0.9% - 5.4%
SUI Tax Rate: 1.419% - 14.4684%
SUI Tax Rate: 0.89% - 9.49%
SUI Tax Rate: 0.06% - 5.46%
SUI Tax Rate: 0.0% - 10.0%
SUI Tax Rate: 0.01% - 10.0%
SUI Tax Rate: 0.23% - 6.23%
SUI Tax Rate: 0.3% - 7.3%
SUI Tax Rate: 0.4% - 8.4%
SUI Tax Rate: 0.13% - 6.23%
SUI Tax Rate: 0.0% - 8.15%
SUI Tax Rate: 1.5% - 8.5%
SUI Tax Rate: 0.0% - 12.0%
SUI Tax Rate: 0.0% - 8.64%
We also provide more information about your state's payroll.
*Rates vary by industry. **Rate range includes Negative and Positive Fund Employers. ***Rates include surcharges. ****Special rules apply to minimum wage standards for this state. Please refer to state laws.
