What Our Payroll Services Cover
Payroll is one of the most compliance-intensive obligations a New Jersey employer faces. Between federal payroll taxes, NJ-specific withholding programs, new hire reporting, and year-end W-2 and 1099 preparation, payroll errors are easy to make and expensive to fix. The IRS and the NJ Division of Taxation take payroll tax compliance seriously — and the penalties for late deposits, missed filings, and misclassified workers are significant.
ProAxis CPA offers CPA-managed payroll services, which is meaningfully different from using a payroll-only provider. When your payroll is managed by a CPA firm, your payroll data integrates directly with your bookkeeping and tax planning. Your payroll entries post correctly to your general ledger, your quarterly and annual payroll tax filings are coordinated with your tax return preparation, and your year-end W-2s are reconciled to your books before they go out.
ProAxis CPA is certified by Intuit in QuickBooks Online Payroll — now independently verifiable on Credly. Our QuickBooks Online, Bookkeeping, and Client Advisory Services credentials are verifiable there too. Click any badge below to verify it.
Our payroll service includes:
- ✓ Payroll processing — weekly, bi-weekly, semi-monthly, or monthly payroll runs with direct deposit for all employees
- ✓ Federal payroll tax withholding and deposits — Social Security, Medicare (FICA), and federal income tax withholding, deposited on the correct schedule
- ✓ NJ income tax withholding — correct withholding using NJ's graduated income tax rates, remitted to the NJ Division of Taxation
- ✓ NJ UI/SDI/FLI withholding — proper calculation and remittance of New Jersey Unemployment Insurance, State Disability Insurance, and Family Leave Insurance contributions
- ✓ Quarterly payroll tax filings — Form 941 (federal), NJ-927 (NJ quarterly withholding), and WR-30 (NJ employee wage report) filed accurately and on time
- ✓ Year-end W-2 and 1099 preparation — W-2s for all employees, 1099-NEC for independent contractors, reconciled to payroll registers and general ledger
- ✓ New hire reporting — NJ requires employers to report new hires to the NJ New Hire Reporting Program within 20 days of hire; we handle this automatically
- ✓ Multi-state payroll — managing payroll tax obligations for employees working in states outside New Jersey
New Jersey Payroll Compliance: What Makes NJ Different
New Jersey has one of the most complex state payroll tax structures in the country. In addition to NJ income tax withholding, every NJ employer must manage three separate state insurance programs:
Unemployment Insurance (UI)
Funded by employer and worker contributions together. The employer pays an experience-rated UI contribution plus Workforce/Supplemental Workforce contributions. The worker has UI and Workforce amounts withheld from each paycheck. For 2026 the UI and Workforce taxable wage base is $44,800 per worker. The employer UI rate varies based on your "experience rating" — how many former employees have collected unemployment benefits. New employers start at a standard rate until experience is established.
State Disability Insurance (SDI)
New Jersey requires disability insurance coverage for all employees. Temporary Disability (SDI) is funded by employers and workers together. Under the State Plan the employer pays its own disability contribution and also withholds the worker share from wages. Employers can either participate in the NJ State Plan or establish an approved private plan. The two sides use different taxable wage bases. For 2026 the employer disability wage base is $44,800 per worker, while the worker disability and Family Leave wage base is $171,100. SDI provides partial wage replacement when an employee is unable to work due to illness or injury unrelated to work.
Family Leave Insurance (FLI)
NJ FLI is employee-funded through payroll deductions and provides partial wage replacement for employees who take approved family leave. The FLI rate is set annually by the NJ Department of Labor and applies to wages up to the FLI taxable wage base. Employers must withhold the correct amount each pay period and remit it with SDI contributions.
Managing these three programs alongside federal payroll taxes requires precise calculation and timely remittance. ProAxis handles all of it — including annual wage base updates when rates change each January.
CPA-Managed Payroll vs. Payroll-Only Services
Standalone payroll services — ADP, Gusto, Paychex — process payroll and file payroll taxes, but they operate in isolation from your accounting and tax planning. When you use a payroll-only service, someone still needs to post payroll journal entries to your books correctly, reconcile payroll liabilities, and make sure your year-end W-2 totals tie to your tax returns. If no one is doing that, errors accumulate silently until they become a larger problem.
At ProAxis, payroll processing is integrated directly with your bookkeeping. Payroll runs trigger automatic journal entries that post to the correct accounts in QuickBooks Online. Payroll tax liabilities reconcile to your balance sheet. At year-end, W-2 totals tie back to your general ledger before anything is filed. This integration eliminates a major category of errors that arise when payroll and accounting are managed by separate providers who do not communicate.
It also means we can catch structuring opportunities that a payroll-only provider would miss. If you are an S-Corp owner, your reasonable compensation level directly affects your self-employment tax savings. If you are adding employees, we can model the payroll tax cost alongside your tax planning. These connections only exist when payroll and tax planning are managed by the same team.
DIY payroll — whether through QuickBooks Payroll or manual processing — is one of the most common sources of payroll tax errors we see when onboarding new clients. Late deposits, incorrect withholding rates, and missed filings are all common. The penalties for these errors compound quickly. ProAxis is built to reduce these risks. Results vary by business and applicable tax rules.
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What Does Payroll Cost at ProAxis?
Bundled with CPA-supervised bookkeeping, payroll typically adds $50–$300 per month depending on headcount and complexity. That is a typical published range, not an offer — the exact fee is scoped on a free call and documented in a written engagement letter. Already running payroll elsewhere? We take over the filings and the bookkeeping sync without a gap — nothing is needed from your current provider beyond report access.
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Frequently Asked Questions
How much does payroll service cost at ProAxis?
Payroll bundled into a ProAxis bookkeeping engagement typically adds $50–$300 per month depending on headcount and complexity (typical published range, not an offer). Standalone payroll without bookkeeping is scoped individually on a free call and confirmed in a written engagement letter.
What are New Jersey employer payroll tax obligations?
NJ employers must withhold and remit NJ state income tax for all covered employees. They must also withhold and remit Unemployment Insurance (UI), State Disability Insurance (SDI), and Family Leave Insurance (FLI). In New Jersey, Unemployment Insurance and Temporary Disability (SDI) are funded by employers and workers together. Employers pay an experience-rated UI contribution plus Workforce/Supplemental Workforce and disability contributions. Workers have UI, disability, Workforce, and Family Leave amounts withheld from their pay. Family Leave Insurance is the one program funded entirely by worker contributions — the employer FLI rate is zero. Rates and the taxable wage bases reset each January. At the federal level, employers must withhold and remit Social Security, Medicare, and federal income tax, and match the Social Security and Medicare contributions. Quarterly filings are required at both the federal (Form 941) and state (NJ-927, WR-30) level.
What is NJ Family Leave Insurance and how does it work?
New Jersey's Family Leave Insurance program provides partial wage replacement for employees on approved leave. Covered leave includes bonding with a newborn, newly adopted, or foster child. It also covers caring for a seriously ill family member. FLI is funded entirely by employee payroll deductions. Employers do not contribute to FLI. They are required to withhold the correct amount each pay period and remit it to the state. The FLI rate and wage base are adjusted annually. FLI contributions are reported on W-2s in Box 14 and must be tracked separately from SDI.
Can ProAxis handle payroll for employees in multiple states?
Yes. Many NJ businesses now have employees working remotely from other states. When an employee works from a state other than New Jersey, you may have payroll tax nexus in that state. That means you need to register as an employer there. You also need to withhold that state's income tax and other applicable taxes. ProAxis manages the registration, withholding, and filing requirements for each state where your employees work. We also advise on state nexus from a business tax perspective.
What are the penalties for late or incorrect payroll tax deposits?
The IRS failure-to-deposit penalty starts at 2% for deposits one to five days late. It rises to 5% for deposits six to fifteen days late. It reaches 10% for deposits more than fifteen days late. Deposits not made within ten days of an IRS demand notice trigger a 15% penalty. Beyond financial penalties, repeated payroll tax failures can lead to IRS installment agreements. In serious cases they can lead to the Trust Fund Recovery Penalty. That penalty holds individual business owners personally liable for unpaid employee trust fund taxes.