Program Overview
What Are NJ SDI and FLI Deductions?
NJ SDI and FLI are two mandatory payroll withholdings that fund wage-replacement benefits for New Jersey workers. You will see both on every paycheck as long as you work in the state, and they are separate from federal Social Security disability (SSDI).
SDI / TDI (Temporary Disability Insurance) provides cash benefits when you cannot work because of a non-work-related illness, injury, or pregnancy. Benefits last up to 26 weeks. Work-related injuries are covered by workers' compensation, not TDI. Common qualifying conditions include surgery recovery, complications from pregnancy, and serious medical treatment that keeps you out of work.
FLI (Family Leave Insurance) provides cash benefits when you need to bond with a new child (birth, adoption, or foster placement), care for a seriously ill family member, or handle certain needs tied to a family member's military deployment. FLI benefits last up to 12 consecutive weeks or 56 intermittent days in a 12-month period.
Both programs pay 85% of your average weekly wage, capped at $1,119 per week in 2026. They are distinct programs with separate contribution rates, but they share the same taxable wage base and benefit formula. To qualify, you must have earned at least $310 per week for 20 base weeks, or a combined total of $15,500, in your base year. The base year is the first four of the last five completed calendar quarters before your claim.
2026 Rates
What Are the 2026 NJ SDI and FLI Contribution Rates?
The NJ Department of Labor sets new rates each calendar year. For 2026, both employee rates dropped compared to 2025:
| Item | 2026 | 2025 |
|---|---|---|
| Employee TDI rate | 0.19% | 0.23% |
| Employee FLI rate | 0.23% | 0.33% |
| Employee wage base | $171,100 | $165,400 |
| Max annual TDI (employee) | $325.09 | $380.42 |
| Max annual FLI (employee) | $393.53 | $545.82 |
| Employer TDI rate (new employer) | 0.50% | 0.50% |
| Employer TDI wage base | $44,800 | $43,300 |
| Employer FLI rate | 0.00% | 0.00% |
| Max weekly benefit | $1,119 | $1,081 |
Once your year-to-date wages pass $171,100, no further TDI or FLI is withheld for the rest of the calendar year. Your paychecks from that point forward will be slightly larger. Despite the higher wage base in 2026, total maximum employee contributions actually fell because both percentage rates decreased.
Employee vs. Employer
Who Pays for NJ SDI and FLI—Employee or Employer?
The funding split differs between the two programs:
TDI: Both the employee and the employer contribute. Employees pay 0.19% on the first $171,100 of wages. Employers pay a rate ranging from 0.10% to 0.75% (0.50% for new employers) on the first $44,800 of wages per employee. The employer rate is experience-rated, meaning it adjusts based on claims history.
FLI: Only employees contribute. The employer rate is zero. Employees pay 0.23% on the first $171,100 of wages.
Employers who maintain an approved private TDI plan are relieved of state-plan contributions, but employee costs under the private plan cannot exceed what the state plan would charge. Private plans must provide benefits at least equal to the state plan. About one-third of covered NJ workers are under private plans rather than the state plan.
Pay Stub Lines
How Do SDI and FLI Appear on Your Pay Stub?
On a New Jersey pay stub, each program appears as a separate withholding line. Labels vary by payroll provider, but common forms include:
- NJ SDI, NJ DI, or NJ TDI for the disability insurance deduction
- NJ FLI for the family leave insurance deduction
These are separate from NJ SUI (state unemployment insurance) and NJ WF/SWF (workforce development fund). All four appear as individual lines. If your stub shows a single combined line, ask payroll to break it out so you can verify each amount matches the correct rate applied to your gross wages for the period.
The year-to-date columns let you track cumulative contributions against the annual caps: $325.09 for TDI and $393.53 for FLI in 2026. When the YTD figure reaches the cap, withholding for that line stops automatically.
Tax Treatment
Are NJ SDI and FLI Deductions Pre-Tax or Post-Tax?
NJ SDI and FLI are post-tax deductions for federal income tax purposes. They do not reduce your federal taxable wages the way a 401(k) or Section 125 health-insurance premium does. They are also not exempt from FICA (Social Security and Medicare).
For NJ state income tax, these contributions are not a deduction that lowers taxable income either. However, if you worked for two or more NJ employers in the same year and your combined withholding exceeded the annual maximums ($325.09 for TDI or $393.53 for FLI in 2026), you can claim a credit for the excess on your NJ-1040 using Form NJ-2450.
If you had only one employer, you cannot use Form NJ-2450. Instead, request a refund of any over-withholding directly from that employer.
When you receive TDI or FLI benefits, the payments are exempt from NJ state income tax. For federal purposes, benefits are taxable only to the extent they come from employer contributions. You may elect federal income tax withholding on benefits by filing Form W-4S.
NJ SDI and FLI on a $70,000 Salary (2026)
| Line item | Amount |
|---|---|
| Annual gross salary | $70,000.00 |
| TDI: $70,000 x 0.19% | $133.00 / year |
| FLI: $70,000 x 0.23% | $161.00 / year |
| Combined TDI + FLI annual | $294.00 / year |
| TDI per biweekly paycheck | $5.12 |
| FLI per biweekly paycheck | $6.19 |
| Combined per biweekly paycheck | $11.31 |
Biweekly deduction breakdown for a worker earning $70,000 per year, paid over 26 periods. The full salary is below the $171,100 wage base, so TDI and FLI apply to every dollar earned.
Other NJ Payroll Taxes
How Do SDI and FLI Interact with NJ SUI and WF?
New Jersey has four separate employee payroll deductions beyond federal taxes. Each has its own rate and wage base:
| Deduction | Employee rate (2026) | Wage base |
|---|---|---|
| SUI (Unemployment Insurance) | 0.3825% | $44,800 |
| WF/SWF (Workforce Development) | 0.0425% | $44,800 |
| TDI (Disability Insurance) | 0.19% | $171,100 |
| FLI (Family Leave Insurance) | 0.23% | $171,100 |
SUI and WF share the lower $44,800 wage base, so withholding for those two stops much earlier in the year. TDI and FLI use the higher $171,100 base and continue being deducted through most or all of the year for workers below that threshold. All four are post-tax and none reduce your FICA-taxable wages.
For a worker earning $70,000, the combined annual cost of all four NJ employee payroll deductions is about $484: SUI $171.36, WF/SWF $19.04, TDI $133.00, and FLI $161.00. That total sits on top of federal income tax, Social Security, and Medicare.
Self-Employed Workers
Does NJ SDI or FLI Cover Self-Employed Workers?
Self-employed individuals are not automatically covered by NJ TDI or FLI. However, you can voluntarily elect coverage by filing with the NJ Division of Temporary Disability and Family Leave Insurance.
If you opt in, you pay the employee contribution rates on your net self-employment earnings, subject to the same $171,100 taxable wage base. You become eligible for benefits after meeting the same qualifying requirements as W-2 workers: at least $310 per week for 20 base weeks, or $15,500 total in the base year.
Independent contractors, freelancers, and sole proprietors who do not opt in cannot claim TDI or FLI benefits. If you are unsure whether your work arrangement qualifies you as an employee under NJ law, the NJ Division of Employer Accounts provides a classification determination process.
Coverage is worth considering if you do not have private short-term disability insurance. TDI benefits pay up to 85% of your average weekly earnings (capped at $1,119 per week in 2026) for up to 26 weeks. FLI provides the same replacement rate for up to 12 weeks of family leave. Without voluntary coverage, self-employed NJ workers have no state safety net for these situations.
Remote and Multi-State
How Do NJ SDI and FLI Apply to Remote or Multi-State Workers?
NJ localizes TDI and FLI based on where the work is performed. If you physically work in New Jersey, your employer should withhold NJ TDI and FLI regardless of where the company is headquartered or where you live.
If you are a NJ resident working entirely from home for an out-of-state employer, that employer may not automatically withhold NJ TDI and FLI. In this case, contact your employer's payroll department and the NJ Division of Temporary Disability Insurance to confirm your coverage status.
Multi-state workers who split time between NJ and another state owe NJ TDI and FLI only on wages tied to work performed in New Jersey. Payroll departments typically use wage-allocation formulas or a primary-state rule depending on the arrangement. Note that NJ's reciprocal tax agreement with Pennsylvania covers income tax withholding only and does not affect TDI or FLI obligations.
If you move out of NJ mid-year but keep working for a NJ-based employer, your coverage depends on where you perform the work going forward, not on your prior residence. Confirm with payroll whenever your work location changes.
Official Sources
Where Do You Find the Current NJ SDI and FLI Rates?
The NJ Department of Labor and Workforce Development publishes updated rates, wage bases, and benefit amounts each year, typically in late December for the following calendar year. Bookmark these official pages:
- Rate information: nj.gov/labor/ea/employer-services/rate-info/ lists employer and worker contribution rates for TDI, FLI, SUI, and WF.
- Benefit details and claims: myleavebenefits.nj.gov covers TDI and FLI eligibility, benefit amounts, and online claim filing.
- Tax credits for excess withholding: nj.gov/treasury/taxation/njit16.shtml explains how to claim a credit on your NJ-1040 if multiple employers over-withheld.
Rates can change each January 1, so verify the current year's figures before adjusting payroll or tax planning. This is general information, not tax advice.
Questions
New Jersey SDI and FLI Payroll Deductions Explained FAQ
Are NJ SDI and FLI deductions mandatory for all employees?
Yes. Every employee working in New Jersey is subject to TDI and FLI withholding. You cannot opt out. Employers must deduct both from each paycheck until the employee's year-to-date wages reach the taxable wage base ($171,100 in 2026). The only variation is whether the employer uses the state plan or an approved private plan.
What happens when my wages pass the $171,100 wage base?
Once your year-to-date wages hit $171,100, your employer stops withholding TDI and FLI for the rest of the calendar year. Your subsequent paychecks will be slightly larger. Withholding resets to zero on January 1 of the next year and begins again with your first paycheck.
Are NJ TDI and FLI benefits taxable income?
TDI and FLI benefits are exempt from NJ state income tax. For federal income tax, benefits are taxable only to the extent they are paid from employer contributions. The portion funded by your own employee contributions is not federally taxable. You can elect federal withholding on benefits by filing Form W-4S.
How do I file a TDI or FLI claim in New Jersey?
File your claim online at myleavebenefits.nj.gov. For TDI, you need medical documentation of your condition. For FLI, you need proof of the qualifying family event. Claims can be filed up to 30 days before your leave begins. Benefits are typically paid within a few weeks of approval.
What is the difference between NJ SDI and workers' compensation?
NJ SDI (TDI) covers non-work-related illnesses, injuries, and pregnancy. Workers' compensation covers injuries and illnesses that arise directly from your job duties or workplace conditions. They are separate programs with separate funding streams and separate claim processes. You cannot collect both at the same time for the same condition.
Does NJ FLI cover bonding with a foster child?
Yes. NJ FLI provides benefits for bonding with a newly placed foster child, in addition to bonding with a newborn or newly adopted child. The bonding leave must begin within 12 months of the placement. Benefits last up to 12 consecutive weeks or 56 intermittent days in a 12-month period.
Can my employer use a private plan instead of the state TDI plan?
Yes. Employers can apply for an approved private TDI plan that replaces the state plan. Private plans must provide benefits at least equal to the state plan, and employee costs cannot exceed state-plan rates. About one-third of covered NJ workers are under private plans. FLI does not have a separate private-plan option.
- Sources: NJ Department of Labor - 2026 Benefit Rates Press Release · NJ Division of Employer Accounts - Rate Information · NJ Division of Taxation - UI/DI/FLI Credits · NJ Division of Employer Accounts - TDI and FLI Employer Handbook · NJ MyLeaveBenefits - TDI Information
- Last updated September 10, 2026
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