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How New Jersey withholding works
New Jersey's income tax is graduated. The rate schedules on the 2025 NJ-1040 run from 1.4% on the first $20,000 up to 10.75% on income over $1 million. Single and married-filing-separate filers use one schedule. Married or civil-union joint filers, heads of household and surviving spouses use a wider one.
Employers don't withhold with those schedules. They use New Jersey's withholding Rate tables A through E (NJ-WT, September 2025), whose rates run from 1.5% to 11.8%, roughly 10% higher than the income tax rates. For example, a single employee earning $60,000 with one allowance would have about $1,954 withheld under Rate A, compared with about $1,767 of tax on the NJ-1040. The difference comes back as a refund when you file.
The NJ-W4: filing status, rate and allowances
The NJ-W4 is separate from your federal W-4. Line 2 is your filing status: Single, Married/Civil Union Couple Joint, Married/Civil Union Partner Separate, Head of Household, or Qualifying Widow(er)/Surviving Civil Union Partner. Single and separate filers are withheld at Rate A. Joint filers, heads of household and surviving spouses are withheld at Rate B unless they choose a different rate on Line 3.
Line 4 is the number of withholding allowances. Each one lowers the wages withheld on by $1,000 a year (for example $38.40 per biweekly pay period). The form warns that entering a number on Line 4 decreases withholding and could result in an underpayment on your return. Line 5 is an extra amount you want deducted from each paycheck.
Two incomes: the wage chart on Line 3
If you're married filing jointly, a head of household or a surviving spouse, and your spouse works or you have more than one job or source of income with combined wages over $50,000, the NJ-W4 tells you to consider its wage chart. You find your wages against your spouse's or other wages and get a letter (B, C, D or E) for a higher rate table. You write that letter on Line 3. The chart is meant to raise withholding on your wages when they will be taxed at a higher rate on your NJ-1040. It is not meant to cover other income, for which you use Line 5.
Claiming exempt on the NJ-W4
Write EXEMPT on Line 6 if your wages plus taxable non-wage income will be $10,000 or less for the year (single or married-separate), or $20,000 or less (married/civil union joint, head of household or surviving spouse; for joint filers this includes your spouse's wages). The exemption is good for one year only, so you must submit a new form every year.
New Jersey W-4 FAQ
What is the New Jersey NJ-W4?+
The NJ-W4 is New Jersey's Employee's Withholding Allowance Certificate. Your employer uses the filing status, rate letter and allowances on it to decide how much New Jersey income tax to withhold. It is separate from your federal W-4.
How much is a New Jersey withholding allowance worth?+
$1,000 a year, or $38.40 per biweekly pay period, of wages withheld on (NJ-WT, September 2025). Each allowance lowers your withholding.
What are New Jersey's income tax rates?+
The 2025 NJ-1040 schedules run from 1.4% to 10.75%, with 10.75% applying to income over $1 million. Employers withhold using NJ's Rate tables A to E, which run from 1.5% to 11.8%.
Which NJ-W4 rate do I get?+
Single and married/civil-union-separate filers are withheld at Rate A. Joint filers, heads of household and surviving spouses are withheld at Rate B, unless Line 3 has a letter from the wage chart that selects a higher table.
When should I use the NJ-W4 wage chart?+
If you are married filing jointly, a head of household or a surviving spouse, and your combined wages (yours plus your spouse's or other jobs) exceed $50,000. The chart points to a rate table that withholds more on your wages.
Can I claim exempt from New Jersey withholding?+
Yes, by writing EXEMPT on Line 6, if your wages plus taxable non-wage income will be $10,000 or less (single or separate) or $20,000 or less (joint, head of household or surviving spouse). You must file a new form every year.
Start with your federal W-4
Your New Jersey withholding follows your pay, but your W-4 is federal. Get the exact lines to fill in.
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