Newark imposes a 1% employer payroll tax under NJ §40:48C-15 on wages paid to employees working in the city, with a carve-out for wages paid to Newark residents to encourage local hiring.
Under NJ §40:48C-15 enabling authority, Newark imposes a 1 percent employer payroll tax on quarterly gross wages paid for work performed in the city, excluding wages paid to Newark residents. This Newark-resident exemption is intended to incentivize local hiring. Employers register with the Newark Department of Finance, file quarterly returns, and remit electronically. Government employers are exempt; nonprofits with qualifying 501(c)(3) status are also exempt under the statute. The tax is on the employer, not withheld from employee wages, and supplements the local property tax base.
Failing to register, file, or remit the payroll tax results in interest, penalties, and potential personal liability for responsible corporate officers under New Jersey tax-collection rules.
See how Newark's business tax classification rules stack up against other locations.
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