Below is a detailed listing of State and federal wage and tax data for 2022 (provided by ADP).
MAXIMUM TAXABLE WAGE BASE
The maximum taxable wages for each employee, which form the basis for Unemployment Insurance and Temporary Disability Insurance Taxes in 2022, have been set by the New Jersey Department of Labor (NJDOL) at $39,800, up from $36,200 last year.
The 2022 withholding rate for Unemployment Insurance Tax from employees’ wages is 0.425%, unchanged from 2021. This withholding is on the first $39,800 of earnings. The maximum employee deduction in 2022 is $381.82 [including withholding for Family Leave Insurance (see next section)].
FAMILY LEAVE INSURANCE
The rate for 2022 is .14% of the first $39,800 of an employee’s wages.
Effective January 1, 2022, the New Jersey minimum wage increased to $13.00 per hour. (See the Minimum Wage section under the Federal section.) NOTE: The New Jersey Wage & Hour Laws specifically exempt automotive sales associates from being paid the New Jersey minimum wage.
SOCIAL SECURITY TAX (FICA)
The 2022 taxable wage base subject to the Social Security portion of the FICA tax is $147,000, up from $142,800 in 2021. The FICA tax rate, a combination of the Social Security (6.2%) and Medicare (1.45%) rates, remains at a total of 7.65% in 2022. There continues to be no limit on the amount of wages subject to the Medicare portion of the tax.
FEDERAL UNEMPLOYMENT TAX (FUTA)
The FUTA tax applicable to New Jersey employers remains at 6% of the first $7,000 of each employee’s earnings in 2021. Employers receive a 5.4% credit for State unemployment taxes paid.
Federal law requires that automotive sales associates be guaranteed the federal minimum wage of $7.25 per hour (effective since July 24, 2009) for every hour worked. NOTE: While dealerships have an obligation to keep the necessary records to document hours worked, automotive sales associates are exempt from the overtime pay requirements for hours worked in excess of 40 in a given workweek. Under federal law, salespersons must be guaranteed a minimum of $7.25 per hour for every hour worked.