New Jersey’s minimum wage will rise to $15.92 an hour for most workers on January 1, 2026 — a 43-cent increase.
For employees of small businesses and seasonal employers, the rate will continue to climb gradually to ease the burden on these operations. Their hourly wage will increase from $14.53 to $15.23 at the start of the year and will continue to rise annually until 2028.
Direct care staff in long-term care facilities will see their minimum hourly wage rise to $18.92, maintaining a $3 gap above the statewide minimum under a 2020 law aimed at stabilizing the workforce.
Farm workers follow a different schedule. Their hourly wage will go from $13.40 to $14.20 in 2026, with additional increases planned through 2030
For tipped employees, the cash wage will rise from $5.62 to $6.05 an hour. Employers can continue to claim a maximum tip credit of $9.87; however, if the combined tips and base pay don’t meet the state minimum wage, the employer must cover the difference.
Tip workers will also benefit from a provision in the One Big Beautiful Bill Act (OBBBA). Individuals may claim an above-the-line deduction of up to $25,000 for qualified tips received. The deduction begins to phase out for single filers with a modified adjusted gross income (MAGI) exceeding $150,000 ($300,000 for joint filers), decreasing by $100 for each $1,000 above those thresholds.
The deduction applies only to occupations where tipping is standard, as outlined by the Treasury Department, and can also be claimed by self-employed individuals and gig workers who earn tips. The deduction can be taken regardless of whether a taxpayer itemizes and is set to expire after 2028.
The New Jersey Department of Labor and Workforce Development adjusts the minimum wage annually, using the Consumer Price Index data from the U.S. Bureau of Labor Statistics as the benchmark. Once the phased increases for seasonal, small business, and farm employees are implemented in 2028 and 2030, respectively, those rates will be adjusted annually in line with the general minimum wage.
About the Author
Salvatore Schibell, CPA, CFP®, CGMA, MS Taxation, MBA, is the tax partner at Lawson, Rescinio, Schibell & Associates, P.C. He specializes in helping construction business owners plan for retirement, maximize the value of their companies, and execute successful succession strategies. Sal can be contacted at 732-539-7328 or salschibell@lrscpa.com.
Disclaimer: This content is for informational purposes only and should not be considered professional advice.