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November 14, 2019
2019-2031

New Jersey announces 2020 wage bases and tax rates for unemployment, disability and family leave insurance

The New Jersey Department of Labor and Workforce Development released the calendar year 2020 taxable wage bases used for state unemployment insurance (SUI), temporary disability insurance (TDI) and family leave insurance (FLI).

The 2020 employer/employee SUI taxable wage base increases to $35,300, up from $34,400 for calendar year 2019.

As we reported, legislation enacted earlier this year (A 3975) and effective January 1, 2020, separates the computation of the TDI/FLI taxable wage base from that of the SUI taxable wage base and increases the figure by almost four times the current level to fund expanded state TDI benefits that take effect July 1, 2020.(EY Payroll Newsflash Vol. 20, #092, 7-16-2019.)

The 2020 TDI/FLI taxable wage base increases to $134,900, even higher than the $131,000 estimate released when A 3975 was enacted.This is 3.82 times higher than the 2020 New Jersey SUI taxable wage base of $35,300.

Employee 2020 SUI-TDI-FLI tax rates

According to the Department's website, the following employee rates are in effect for the remainder of 2019 and for calendar year 2020:

  • SUI-employee. Employers must continue to withhold employee SUI taxes through December 31, 2019 from employee wages earned up to the SUI taxable wage base of $34,400 at the worker SUI rate of 0.425% (includes the 0.0425% Workforce Development and Supplemental Workforce Fund surcharge). The rate continues at 0.425% for calendar year 2020, on wages earned up to $35,300. Based on the 2020 taxable wage base of $35,300, an employee's maximum SUI contribution for 2020 will be $150.03.
  • TDI. The TDI rate continues at 0.17% through December 31, 2019 and increases as of January 1, 2020 (for calendar year 2020) to 0.26%. Based on the increased 2020 taxable wage base of $134,900, up from $34,400 for 2019, an employee's maximum TDI contribution for 2020 will increase to $350.74, up from $58.48 for calendar year 2019.
  • FLI. The FLI rate continues at 0.08% for the remainder of 2019 and increases as of January 1, 2020 (for calendar year 2020) to 0.16%. Based on the increased 2020 taxable wage base of $134,900, up from $34,400 for 2019, an employee's maximum FLI contribution for 2020 will be $215.84, up from $27.52 for 2019.

Other SUI, TDI and WC amounts for calendar year 2020

Other SUI, TDI and Workers' Compensation (WC) totals for calendar year 2020 are as follows:

  • Maximum Workers' Compensation (WC) weekly benefit rate: $945 (up from $921)
  • Maximum Unemployment Insurance (UI) weekly benefits rate: $713 (up from $696)
  • Maximum Temporary Disability Insurance (TDI) weekly benefit rate (effective January 1, 2020 to June 30, 2020) : $667 (up from $650)
  • Maximum Temporary Disability Insurance (TDI) weekly benefit rate (effective July 1, 2020 to December 31, 2020) : $881 (up from $667)
  • Alternative earnings test amount for UI and TDI: $10,000 (up from $8,600)
  • Base week amount: $200 (up from $172)

Value of room and board

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 2020:

Full Room and Board, Weekly

$237.60

Lodging per week

$101.80

Meals per day

$27.20

If less than three meals per day, individual meals shall be valued as follows:

Breakfast

$8.20

Lunch

$8.20

Dinner

$10.90

These amounts are used when the employer does not assign a value to such payments.

New Jersey fiscal year 2020 SUI rates remained on the same table as FY 2019

As we previously reported, employer SUI tax rates continue to range from 0.4% to 5.4% on Rate Schedule B for FY 2020 (July 1, 2019 through June 30, 2020). The new employer rate continues to be 2.8% for fiscal year 2020. (EY Payroll Newsflash Vol. 20, #101, 7-25-2019.)

These rates include the 0.1% Workforce Development Fund rate and the 0.0175% Supplemental Workforce Fund rate.

Although SUI tax rates are assigned on a fiscal year basis, employers should continue using the 2019 SUI taxable wage base of $34,400 for the third and fourth quarters of 2019. The 2020 taxable wage base of $35,300 goes into effect as of the first quarter 2020.

The employer FY 2020 SUI tax rate notices were issued during the fourth week of July 2019.

For more information on unemployment taxes in New Jersey, contact the Department at +1 609 633 6400 or see the Department's website.

Ernst & Young LLP insights

Employers may want to notify their employees now of the significant increase to the TDI/FLI withholdings beginning January 1, 2020.The updated FLI poster is available here.

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Contact Information
For additional information concerning this Alert, please contact:
 
Workforce Tax Services - Employment Tax Advisory Services
   • Kenneth Hausser (kenneth.hausser@ey.com)
   • Debera Salam (debera.salam@ey.com)
   • Kristie Lowery (kristie.lowery@ey.com)

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