Overview
As of June 1, 2022 (due to the launch of the Workday system), New Jersey residents saw a change in how NJ state taxes are withheld from their paychecks. Please see below for more information on how Banner and Workday calculated taxes differently, resulting in a new, more accurate calculation.
Multi-state tax rules reduce New Jersey state taxes by the amount deducted for Pennsylvania local taxes, namely the Philadelphia Non-Resident City Wage Tax. This reduction has not been historically calculated in Banner, resulting in extra taxes being withheld from each paycheck and refunded to you at the end of the year through the tax filing process. Workday will be able to implement these multi-state rules, so you may see this difference in your payslip as well as at the end of the year during the tax filing process
This change will ultimately result in a more accurate calculation of your owed state taxes. This may, however, result in a smaller refund from the State of New Jersey at the end of the tax year if you have been receiving one.
In summary:
- Both NJ State Tax and Philadelphia City Wage Tax (Non-Residents) have been withheld in Banner
- NJ State Tax should be reduced by the amount of City Wage Tax residents pay, but this has not been historically calculated in Banner
- Workday will do this calculation automatically, resulting in more accurate deductions, which may result in a smaller refund on your state taxes
If you would like to change your tax withholding preferences in order to save more from each paycheck to make up for this change, you can do so by following these instructions.
Example of this Change
Because both sets of taxes have been withheld (and will continue to be), you have likely never noticed this difference, and you may not notice the change until you are filing your tax returns.
In this example, the employee's paycheck from Banner is withholding $364.69 for New Jersey State Taxes and $226.49 for Philadelphia City Wage Taxes (non-resident).
Banner (Payroll view, NOT your payslip):
In Workday, the total of the New Jersey State tax is $138.20. This is because the Philadelphia City Wage tax ($226.49) was already deducted from your NJ State Taxes (previously $364.69).
Workday (Payroll view):
If you have any questions, please contact the Payroll Office at payroll@sju.edu