New Jersey Deductions From Wages: Required, Authorized, and Prohibited

In New Jersey, deductions from wages are limited to three categories under N.J.S.A. 34:11-4.4: withholdings required by state or federal law, a defined list of voluntary deductions the employee has authorized in writing, and amounts a court has ordered. Anything outside those three lanes is unlawful, and no voluntary deduction — even one you signed off on — can drop your pay below the state minimum wage, which reached $15.92 per hour on January 1, 2026.¹

Deductions Required by Law

These come out of every paycheck automatically. No one asks your permission because the statutes don’t require it.

Federal withholdings include income tax based on your W-4, Social Security at 6.2% up to the annual wage cap, and Medicare at 1.45% on all wages. Wages above $200,000 pick up an additional 0.9% Medicare surtax.

New Jersey then applies its own graduated income tax, running from 1.5% to 11.8% depending on earnings, plus contributions to four state programs calculated on the first $171,100 in covered wages for 2026:

Temporary Disability Insurance at 0.19% of covered wages, capped at $325.09 per year
Family Leave Insurance at 0.23% of covered wages, capped at $393.53 per year
Unemployment Insurance at 0.3825% of the first $44,800 in wages
Workforce Development at 0.0425% of the first $44,800 in wages

Combined, the New Jersey employee contribution across those four programs works out to 0.845%.² The TDI and FLI rates are reset each year and apply to a higher wage base than the unemployment and workforce development pieces.³

Deductions That Need Your Written Authorization

N.J.S.A. 34:11-4.4 lists specific purposes an employer may deduct for, but only with your written permission or an authorization under a collective bargaining agreement. The employer cannot make money on any of these; the deduction has to match what it is paying out on your behalf.⁴

Health Insurance Premiums

Enroll in your employer’s health plan and your share of the premium comes out each pay period. If the employer runs a Section 125 cafeteria plan, those premiums come out pre-tax, which lowers your taxable income.⁵ The deduction cannot exceed the actual cost of your coverage.

Union Dues

If you are covered by a collective bargaining agreement, your dues can be deducted automatically. N.J.S.A. 34:13A-5.5 authorizes those payroll deductions with your written permission or through the terms of the union contract.

Public-sector employees in New Jersey have to opt in affirmatively. The Supreme Court held in Janus v. AFSCME that taking money from a nonconsenting public employee for a union violates the First Amendment.⁶ Private-sector workers remain governed by whatever the union and employer have negotiated.

Retirement Plan Contributions

Contributions to a 401(k), 403(b), or similar employer-sponsored plan come out only when you elect them. At the federal level, ERISA governs how those plans operate.

New Jersey also runs RetireReady NJ (formerly Secure Choice) for businesses with 25 or more employees that have been operating for at least two years and don’t already offer a retirement plan.⁷ Covered employers auto-enroll their workers at a default 3% of gross pay, deducted on a Roth (after-tax) basis into a Roth IRA. You can change the rate or opt out at any time.⁸

Court-Ordered and Agency-Ordered Deductions

Once a valid order lands on the employer’s desk, compliance is not optional.

Child Support and Alimony

A child support order comes to the employer as an income withholding order, and the specified amount goes to the New Jersey Family Support Payment Center, which forwards it to the custodial parent. Alimony can run through the same center when it is combined with a child support order, or go directly to the recipient when ordered separately.

Federal law under the Consumer Credit Protection Act caps how much of your disposable earnings can be withheld for support:

50% if you support another spouse or child and payments are current
55% if you support another spouse or child and are more than 12 weeks behind
60% if you do not support another spouse or child and payments are current
65% if you do not support another spouse or child and are more than 12 weeks behind

Those are ceilings; the actual amount comes from the court order itself.⁹ When a support order competes with other garnishments, support takes priority. An employer cannot fire you simply because a child support withholding order arrived.

Creditor Garnishments

A creditor with a court judgment for a consumer debt — a credit card balance, a medical bill — can garnish wages, and New Jersey’s rules are tighter than the federal baseline. The employer must withhold the lowest of three amounts:

10% of your gross weekly pay
25% of your disposable earnings that week
The amount by which your disposable weekly earnings exceed $217.50

If your disposable earnings are $217.50 per week or less, nothing can be garnished. Only one creditor garnishment can be active at a time.¹⁰ For most workers, the 10% of gross pay cap is what actually controls, because 10% of gross usually comes in below 25% of disposable earnings. The CCPA also bars an employer from firing you over a garnishment for a single debt, no matter how many collection proceedings that one debt generates.⁹

Tax Levies

The IRS and the New Jersey Division of Taxation can levy wages directly for unpaid taxes, and tax levies aren’t subject to the percentage caps that apply to other garnishments. The exempt amount you get to keep is based on your filing status, dependents, and standard deduction, and the tax authority tells the employer what that figure is. Withholding starts immediately and runs until the debt is paid or the agency releases the levy. An employer that ignores a levy can be held personally liable for the amount that should have been withheld. Payment plans with the taxing agency can sometimes reduce or stop the levy.

Deductions Your Employer Cannot Take

This is where most disputes start. If a deduction is not required by law, not on the statutory list of authorized purposes with your written consent, and not backed by a court order, it is illegal.⁴

Employers cannot dock pay for cash register shortages, broken equipment, customer walkouts, or other business losses, even when the employee was clearly at fault. Those are treated as costs of doing business. Accidental overpayments work the same way: the employer cannot simply pull the money back from the next paycheck without written authorization. Uniform costs, required tools, and mandatory training expenses are off the table too unless you have signed off in writing.

And even with your written consent, no deduction can drop your earnings below the minimum wage.¹ The federal Fair Labor Standards Act reaches the same result by barring deductions for items that primarily benefit the employer when doing so would push pay below the minimum wage or cut into required overtime.¹¹

What to Do About an Improper Deduction

Start with the employer, in writing. Many bad deductions are administrative — a payroll code that never got updated, a benefit deduction that should have stopped when coverage ended, an overpayment clawback that no one authorized. Identifying the specific pay period and amount in writing creates a record and often resolves the problem on its own.

If the employer will not fix it, you can file a wage claim with the New Jersey Department of Labor and Workforce Development at no cost. The department investigates, can order repayment of the withheld wages, and has authority to impose fines.

You can also sue directly. Under the New Jersey Wage Payment Law, a successful claim recovers the unpaid wages, liquidated damages of up to 200% of the amount owed, and attorney fees.¹² An employer that illegally withholds $1,000 could end up owing $3,000. When the same unlawful deduction affects a group of workers, a class action may be an option, and the damages multiplier can turn small deductions into significant liability.

Retaliation for filing a wage complaint carries its own remedies: reinstatement, back pay, and liquidated damages of up to 200% of the lost wages. Filing a complaint or testifying about wage violations is protected activity, and an adverse action within 90 days of the complaint is presumed to be retaliation.

Criminal penalties are also on the books. A first conviction is a disorderly persons offense punishable by a fine of $500 to $1,000 and 10 to 90 days in jail, or both; a second or subsequent conviction raises the range to $1,000 to $2,000 and 10 to 100 days. Each week the violation continues counts as a separate offense.¹²

1
Department of Labor & Workforce Development. New Jersey Minimum Wage Rates Effective January 1, 2026
2
NJ.gov. Rate Information, Contributions, and Due Dates
3
NJ.gov. Division of Temporary Disability and Family Leave Insurance
4
Justia. New Jersey Revised Statutes Section 34:11-4.4 – Withholding From Wages
5
Office of the Law Revision Counsel. 26 USC 125 – Cafeteria Plans
6
Supreme Court of the United States. Janus v. American Federation of State, County, and Municipal Employees, Council 31
7
NJ.gov. RetireReady NJ – About the Secure Choice Savings Program
8
NJ.gov. RetireReady NJ – Contributions for Savers
9
U.S. Department of Labor. Fact Sheet #30: Wage Garnishment Protections of the Consumer Credit Protection Act (CCPA)
10
NJ Courts. Wage Execution – Appendix XI-J
11
U.S. Department of Labor. Fact Sheet #16: Deductions From Wages for Uniforms and Other Facilities Under the FLSA
12
Department of Labor & Workforce Development. Selected NJ State Labor Laws and Regulations – Section: 34:11-4.10 Violations, Penalties