1. What is Net Pay Calculation?

The net pay calculation determines your take-home pay after all deductions including federal tax, state tax, and FICA (Social Security and Medicare) contributions. In New Jersey, state tax has specific brackets that affect your final net pay.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• Gross Pay — Your total annual salary before deductions
• Federal Tax — Amount withheld for federal income tax
• New Jersey State Tax — Amount withheld for NJ state income tax
• FICA — Social Security (6.2%) and Medicare (1.45%) contributions

3. Understanding New Jersey Taxes

Details: New Jersey has graduated state income tax rates:

• 1.4% on first $20,000 of taxable income
• 1.75% on $20,001-$35,000
• 3.5% on $35,001-$40,000
• 5.525% on $40,001-$75,000
• 6.37% on $75,001-$500,000
• 8.97% on $500,001-$1,000,000
• 10.75% on over $1,000,000

4. Using the Calculator

Tips: Enter your annual gross pay and all deduction amounts in USD. The calculator will compute your annual net pay (take-home pay after all deductions).

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between gross pay and net pay?
A: Gross pay is your total salary before deductions, while net pay is what you actually receive after all taxes and deductions.

Q2: How is New Jersey state tax calculated?
A: NJ uses graduated tax rates with different brackets. The calculator lets you input your actual withholding amount.

Q3: What is included in FICA?
A: FICA includes Social Security (6.2% on income up to $147,000 in 2022) and Medicare (1.45% on all wages, plus 0.9% additional Medicare tax on wages over $200,000).

Q4: Are there local taxes in New Jersey?
A: Some NJ municipalities have local payroll taxes, but these are not included in this calculator.

Q5: How often should I calculate my net pay?
A: You should recalculate whenever your income changes significantly or at least annually to adjust your budget.