Severance Pay in New Jersey: Calculator & 2026 Guide
Calculate your estimated severance package in New Jersey. New Jersey state tax is 10.8%, for a combined 32.8% withholding rate.
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New Jersey Severance Pay Laws
New Jersey requires 1 week per year of service for mass layoffs (50+ employees). Add 4 weeks if less than 90 days notice was given.
How Severance Is Taxed in New Jersey
| Tax Type | Rate | On $50,000 Severance |
|---|---|---|
| Federal (Supplemental) | 22.0% | $11,000 |
| New Jersey State Tax | 10.8% | $5,375 |
| Total Withholding | 32.8% | $16,375 |
| You Keep | 67.3% | $33,625 |
New Jersey Severance by Industry
Example: 5 years of service, $75,000 salary, individual contributor in New Jersey
| Industry | Weeks/Year | Gross Estimate | After Tax |
|---|---|---|---|
| Technology | 2-4 | $21,635 | $14,549 |
| Finance & Banking | 2-4 | $21,635 | $14,549 |
| Healthcare | 1-3 | $14,423 | $9,700 |
| Retail | 0.5-2 | $7,212 | $4,850 |
| Manufacturing | 1-3 | $14,423 | $9,700 |
| Consulting & Professional Services | 2-4 | $21,635 | $14,549 |
| Government | 1-2 | $7,212 | $4,850 |
| Nonprofit | 1-2 | $10,817 | $7,275 |
| Other Industry | 1-3 | $14,423 | $9,700 |
How to Negotiate Severance in New Jersey
New Jersey requires mandatory severance for mass layoffs. If your company laid off 50+ workers, you're entitled to at least 1 week per year of service by law.
- ✓ Ask for more weeks: Counter with 50% more than the initial offer
- ✓ Negotiate COBRA: Employer-paid health coverage for 6-12 months
- ✓ Get a written reference: Protect your future career prospects
- ✓ Review non-compete clauses: Negotiate restrictions before signing
- ✓ Consult a lawyer: Employment attorneys often negotiate 2-5x the original offer
Think Your Severance Is Too Low?
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New Jersey Severance Pay FAQ
Is severance pay required in New Jersey?▼
Yes, New Jersey requires severance pay in certain circumstances, particularly during mass layoffs. New Jersey requires 1 week per year of service for mass layoffs (50+ employees). Add 4 weeks if less than 90 days notice was given.
How is severance taxed in New Jersey?▼
Severance in New Jersey is taxed at 32.8% combined — 22% federal supplemental rate plus 10.8% New Jersey state income tax. On a $50,000 severance, you'd take home approximately $33,625.
What is the WARN Act in New Jersey?▼
New Jersey has an enhanced WARN Act requiring 90 days advance notice (more than the federal 60 days) for layoffs affecting 100+ employees. Failure to provide proper notice can result in back pay for the notice period.
Can I collect unemployment and severance in New Jersey?▼
This depends on how your severance is structured. Some New Jersey workers can receive both simultaneously, while others may see a delay in unemployment benefits. If severance is paid as a lump sum, it's less likely to delay unemployment than if paid as continued salary. Contact New Jersey's unemployment office for specific guidance.
Severance Pay in Nearby States
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