The New Jersey FLI tax is a 0.23% payroll deduction in 2026, taken only from employees, on wages up to a taxable base of $171,100. That works out to a maximum of about $393.53 per worker for the year. The money funds New Jersey’s Family Leave Insurance program, which pays partial wage replacement when you take time off to bond with a new child or care for a seriously ill family member.
What Comes Out of Your Paycheck in 2026
The 2026 employee contribution rate is 0.23% of taxable wages, applied to the first $171,100 you earn.1State of New Jersey. Division of Employer Accounts – Rate Information, Contributions, andூages Once your year-to-date earnings pass that cap, the deduction stops for the rest of the calendar year and starts again in January. If you earn less than the cap, you pay 0.23% on everything you earn. At $60,000 in annual wages, that comes to roughly $138 spread across your pay periods.
Employers do not pay into the family leave fund. This is an employee-only contribution, distinct from the employer-side unemployment insurance tax.
The rate changes every year based on the fund’s balance, and recent history shows how sharply it can move. In 2023 and 2024, the employee rate dropped to 0.00% because the fund’s surplus exceeded a statutory threshold, and workers saw no FLI deduction at all. Contributions resumed in 2025. The taxable wage base has climbed from $161,400 in 2024 to $165,400 in 2025 and now $171,100 in 2026.2State of New Jersey. Department of Labor and Workforce Development – New Benefit Rates 2026
Where It Shows Up on Your Pay Stub and W-2
The FLI deduction appears on your pay stub alongside New Jersey’s other payroll withholdings: unemployment insurance, temporary disability insurance, and the workforce development and supplemental workforce fund contributions. At year’s end, the total FLI amount you paid is reported in Box 14 of your W-2. Hold onto that number; it matters if you itemize state and local taxes on your federal return.
Are FLI Benefits Taxable?
If you actually file a claim and receive family leave payments, the tax picture splits between the federal and state sides.
On the federal side, benefits are taxable income. The IRS confirmed this in Revenue Ruling 2025-4, which holds that state-paid family leave benefits count as gross income.3Internal Revenue Service. Revenue Ruling 2025-4 The same ruling clarifies that these benefits are not wages for federal employment tax purposes, so no Social Security or Medicare tax applies.
New Jersey issues a Form 1099-G for the benefits you received during the year, which you can download from your account at myleavebenefits.nj.gov.4State of New Jersey. Division of Temporary Disability and Family Leave Insurance – Tax Forms Benefits are taxable in the year the payments were issued, not the year the leave was taken. Leave that runs into December with checks arriving in January belongs on the following year’s return.
On the state side, New Jersey does not tax FLI benefits on your state return. The state describes the benefits as “federally taxable,” and no New Jersey income tax is withheld from your payments.4State of New Jersey. Division of Temporary Disability and Family Leave Insurance – Tax Forms You do not report the amount as New Jersey income.
Who Pays and Who Doesn’t
The FLI tax applies to employees whose wages are subject to New Jersey’s unemployment compensation law. A few boundaries are worth knowing.
Self-Employed Workers
Self-employed people and independent contractors cannot opt into FLI. Coverage is limited to employees covered by the state’s unemployment compensation law. If you work for yourself, nothing is withheld, and you are not eligible for benefits.
Private Plan Employers
Some employers cover family leave through an approved private plan rather than the state fund. The private plan must offer benefits at least as generous as the state plan and needs approval from the Division of Temporary Disability and Family Leave Insurance.5Justia. New Jersey Revised Statutes Section 43-21-39.5 Your right to family leave coverage does not change either way.
Employer Withholding and Filing
Every employer covered by New Jersey’s unemployment compensation law must withhold and remit FLI contributions.6Justia. New Jersey Code 43-21-7 – Contributions If a business miscalculates or fails to withhold the correct amount, the employer bears the liability. The state collects from the business, not from the shorted worker. Withheld amounts must be held in trust until remitted, and the deduction must be noted on the pay stub or in another written notice.7State of New Jersey. Family Leave Insurance Poster
Two forms are due each quarter. Form NJ-927 reports total tax amounts across all New Jersey payroll taxes, and Form WR-30 breaks out wages paid to each employee.8NJ Division of Taxation. Employer Payroll Tax Electronic Filing and Reporting Options Both forms and the payment are due by the 30th of the month after each quarter closes.9Division of Taxation. New Jersey Division of Taxation – Income Tax – Reporting and Remitting
- Q1 (January–March): April 30
- Q2 (April–June): July 30
- Q3 (July–September): October 30
- Q4 (October–December): January 30
Penalties for Late Filing or Payment
Interest on unpaid contributions runs at 1.25% per month from the due date until the state receives payment, and the law does not allow the state to waive properly assessed interest.10State of New Jersey. Interest and Penalties
Separate penalties apply to each form. A late NJ-927 costs $10 per day for the first five days past due, then $10 per day or 25% of the contributions owed, whichever is less. Late or inaccurate WR-30 filings are charged per employee: $5 per employee on a first offense, $10 on a second offense within eight consecutive quarters, and $25 on a third or later offense within that window.10State of New Jersey. Interest and Penalties
For a 50-employee company, a third late WR-30 alone runs $1,250 before any interest is added. Because the state cannot waive interest once it accrues, the practical defense is on-time filing.