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NJ: Minimum Wage Increases and Sales Tax Decreases on January 1st

Minimum Wage

On January 1, 2018, the NJ minimum wage will increase 16 cents from $8.44 per hour to $8.60 per hour.

The increase is mandated by New Jersey’s constitution, which was amended in 2013 to make increases to the wage floor automatic based on inflation, as measured by the federal consumer price index.

This year’s 16-cent increase is the largest annual hike since the amendment was approved by voters to raise the minimum wage by a dollar to $8.25 an hour in 2014 and make future increases automatic.

It jumped from $8.25 to $8.38 in 2015, but remained the same in 2016 because the state’s cost of living was unchanged. It jumped again last year from $8.38 to $8.44 an hour.

Sales Tax

On January 1, 2018 the state’s sales and use tax rate will decrease to 6.625%.

This is the phase two of the rate reduction that passed in October of 2016. The first phase went into effect on January 1, 2017 when the tax rate decreased from 7% to 6.875%.