New Jersey vs Pennsylvania taxes

At state level, the lead changes hands

On $75,000 a single filer keeps $59,238 in Pennsylvania and $58,491 in New Jersey: $746 more in Pennsylvania, before any Pennsylvania local tax. The two states build their taxes in opposite ways.

Pennsylvania charges a flat 3.07% from the first dollar, with no standard deduction and no personal exemption. New Jersey is progressive, starting at 1.4% on the first $20,000 and rising through seven bands, with a $1,000 personal exemption and no standard deduction. On a small salary New Jersey’s low bands charge less; as pay rises its rates climb past Pennsylvania’s flat one.

Single, the crossover sits near $48,500: below it New Jersey keeps more, above it Pennsylvania does. For a married couple filing jointly, whose New Jersey bands are wider, it moves up to about $96,500. By $150,000 single, Pennsylvania keeps $3,475 more; by $250,000, $6,794.

Payroll deductions lean the same way. New Jersey takes three: unemployment and workforce funds, temporary disability insurance and family leave insurance, together $505 on $75,000. Pennsylvania takes one, unemployment compensation at 0.07% of all wages, $53.

Pennsylvania’s local tax is not in these figures

The Pennsylvania column leaves out the local Earned Income Tax that more than 500 Pennsylvania jurisdictions levy, set by where you live and where you work. There is no single rate to apply, so the calculator does not guess. New Jersey has no local income tax anywhere, so its column is complete.

The local tax is large enough to change the answer. In most of Pennsylvania the resident rate is around 1% of wages. Adding 1% to the Pennsylvania side on $75,000 all but erases its lead: the two states end up within $4 of each other. Philadelphia is different: its resident wage tax is roughly 3.75%, and at that rate New Jersey keeps about $2,066 more on $75,000. Many Pennsylvania municipalities also charge a small flat Local Services Tax on people who work there.

So “Pennsylvania is cheaper” holds on higher salaries in most of the state, but it is not true for a Philadelphia resident on an ordinary salary. Check your own municipality’s rate before deciding.

Commuting across the Delaware

New Jersey and Pennsylvania have a reciprocal agreement, and it means a commuter pays state income tax where they live. The New Jersey Division of Taxation sets out the agreement: compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey income tax, and New Jersey residents are likewise not subject to Pennsylvania income tax.

• Live in New Jersey, work in Pennsylvania: you pay New Jersey income tax only. To stop your employer withholding Pennsylvania tax, give it Form REV-419EX. If you work in Philadelphia, the city’s wage tax still applies: the agreement does not cover it.
• Live in Pennsylvania, work in New Jersey: you pay Pennsylvania income tax only, plus your own municipality’s local tax. Form NJ-165 tells your employer not to withhold New Jersey tax.

The agreement covers wages and other pay for work as an employee. Self-employment income and other income taxable in both states are outside it. For an ordinary employee, the comparison above is the right one: it is the state you live in that decides the income tax.

What the take-home figure does not count

Property taxes, housing and commuting costs differ widely on either side of the river, and they often matter more than the gap above. This page compares only what is taken from wages.

Questions people ask

Do you take home more in New Jersey or Pennsylvania on $75,000?

Pennsylvania, by $746 a year, or $62 a month, for a single filer in 2026. That counts federal tax, Social Security, Medicare, state income tax and every state payroll deduction.

Is the difference the same at every salary?

No. The side that keeps more changes with the salary: $30,000: New Jersey by $251; $50,000: Pennsylvania by $45; $75,000: Pennsylvania by $746; $100,000: Pennsylvania by $1,650; $150,000: Pennsylvania by $3,475; $250,000: Pennsylvania by $6,794.

Does any New Jersey town levy a local income tax?

No. No New Jersey municipality levies one, so the New Jersey column is complete wherever you live in the state. In Pennsylvania, more than 500 jurisdictions levy a local Earned Income Tax, which the Pennsylvania column does not include.

Does the reciprocal agreement cover Philadelphia's wage tax?

No. The agreement covers the two states' income taxes only. A New Jersey resident who works in Philadelphia is still subject to the city's wage tax, and local taxes elsewhere in Pennsylvania are outside the agreement too.

Why does Pennsylvania tax my 401(k) contributions?

Pennsylvania does not recognize 401(k) deferrals, so contributions are taxed in the year you earn them, unlike under federal rules. In return, qualified withdrawals after 59½ are not taxed by Pennsylvania. These figures assume no retirement contributions, so they do not show the difference.

What this comparison covers

Income tax and payroll deductions on wages: federal income tax, Social Security, Medicare, state income tax, every state payroll deduction. It does not compare sales tax, property tax, housing or the cost of living, which can outweigh the difference in take-home pay. Figures assume the standard deduction, no dependents and no pre-tax retirement contributions. See how we calculate.