Register as an employer
Before you pay wages, get an EIN from the IRS and register with the State of New Jersey as an employer for withholding and unemployment and disability insurance contributions. Keep the account numbers where your payroll service can use them.
Hiring in another state? Employer registration in another state.
What comes out and what you add
From each paycheck you withhold federal income tax, Social Security and Medicare, and New Jersey income tax and certain state payroll contributions. As the employer, you also pay your share of Social Security and Medicare, federal and state unemployment taxes, and employer-side state contributions. The exact set depends on your business.
The reports
Employers typically file a federal quarterly return (Form 941) and an annual federal unemployment return (Form 940), and file New Jersey quarterly returns and wage reports. At year end you provide Forms W-2 to employees and file them with the government. A payroll service can prepare and file these, and you remain responsible for accuracy.
Want us to handle it?
We keep payroll records, liability accounts and year-end payroll reconciled with your books. State payroll support is confirmed for your state before we start.
Price: Free review of your books first, then a written quote before any work starts.
Get a free review and quote Payroll and leave tracking in NJ
Deposits
Withheld taxes are deposited on a schedule that depends on how much you owe. Missed or late deposits are penalized. Set them up as automatic payments through your payroll service.
How payroll fits in your books
Each payroll records gross wages as an expense, employer taxes as an expense, and amounts withheld as liabilities until paid. Reconcile the payroll liability accounts every quarter against your tax filings. When the numbers do not tie out, something is wrong.
Common mistakes
Paying workers as contractors who should be employees. Paying yourself as an owner without understanding what your entity type allows. Forgetting NJ filings because the federal ones were automatic. Using personal funds for tax deposits.
Worked example with numbers
One employee earns $2,000 gross for a pay period. Employee withholdings come out of the check and are held as liabilities until deposited, while the employer also owes its own share of payroll taxes. The company's cost for the period is $2,000 of wages plus employer taxes, not just the $2,000. Record the full payroll, then the deposits that clear the liabilities.
Rates, wage bases and due dates change. Take the numbers from the IRS and the NJ Division of Taxation and Department of Labor, or let a payroll service calculate them.
Check your work
Each quarter, tie wages, withholding and employer taxes in your payroll reports to the returns you filed and the deposits you made. Payroll liability accounts should return to zero after each deposit.
Common questions
Can I run payroll myself?
Yes, with a good payroll service. The risk is in the filings and reconciliations afterward. We can process payroll or just reconcile it.
When do I pay myself through payroll?
Depends on your entity type and tax election. Ask your tax professional before you decide.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.