New Jersey is one of the most expensive states in the country, with the highest property taxes in the nation (2.23% average, over 3% in some municipalities) and a progressive income tax that reaches 10.75% on income above $1 million. Despite this, New Jersey offers genuinely high incomes — the state has the 3rd highest median household income in the U.S. (~$97,000), driven by proximity to New York City and Philadelphia, a strong pharmaceutical/biotech corridor, financial services, and healthcare. The northern half of the state is expensive and NYC-oriented, while South Jersey and the shore towns are more affordable. The core financial question for NJ residents is whether the high wages offset the heavy tax burden — compared to no-income-tax states like Texas or Florida, NJ residents pay $8,000–$15,000 more per year.
New Jersey at a Glance
| Metric | Value | National Rank |
|---|---|---|
| Population (2024) | 9.3 million | 11th |
| Median household income | $89,703 | 3rd highest |
| Median home price | $480,000 | High |
| Cost of living index | 120 | High |
| State income tax | 1.4-10.75% | Very high |
| Sales tax | 6.625% | Above average |
| Property tax (effective rate) | 2.23% | Highest in US |
Income and Housing
| City/Area | Median Income | Median Home Price | Median Rent (2BR) |
|---|---|---|---|
| Bergen County | $105,000 | $580,000 | $2,200 |
| Morris County | $120,000 | $600,000 | $2,100 |
| Hudson County (Jersey City) | $85,000 | $520,000 | $2,800 |
| Middlesex County | $96,000 | $460,000 | $1,900 |
| Essex County (Newark area) | $68,000 | $400,000 | $1,650 |
| Ocean County | $75,000 | $430,000 | $1,600 |
| Camden County | $72,000 | $280,000 | $1,350 |
| Monmouth County | $105,000 | $560,000 | $1,900 |
| Atlantic City area | $52,000 | $245,000 | $1,250 |
Property Tax: The #1 Financial Factor in NJ
| Home Value | Annual Property Tax (at 2.23%) | Monthly | vs. National Avg (1.07%) |
|---|---|---|---|
| $300,000 | $6,690 | $558 | +$3,480/yr extra |
| $400,000 | $8,920 | $743 | +$4,640/yr extra |
| $500,000 | $11,150 | $929 | +$5,800/yr extra |
| $600,000 | $13,380 | $1,115 | +$6,960/yr extra |
Some municipalities (Camden, Newark, Trenton) have effective rates over 3%.
Income Tax Brackets (2025)
| Taxable Income (Single) | Rate |
|---|---|
| Up to $20,000 | 1.4% |
| $20,001-$35,000 | 1.75% |
| $35,001-$40,000 | 3.5% |
| $40,001-$75,000 | 5.525% |
| $75,001-$500,000 | 6.37% |
| $500,001-$1,000,000 | 8.97% |
| Over $1,000,000 | 10.75% |
Total Tax Burden: NJ vs. Other States
| Gross Income | NJ Total Tax (Fed+State+Prop on $400K home) | Texas (no income tax, 1.60% prop) | Florida (no income tax, 0.86% prop) |
|---|---|---|---|
| $100,000 | $35,585 | $27,665 | $25,065 |
| $150,000 | $50,343 | $40,393 | $37,793 |
| $200,000 | $66,093 | $54,093 | $51,493 |
NJ residents pay $8K-$15K more per year than comparable no-income-tax states.
New Jersey Pros and Cons
| Financial Pros | Financial Cons |
|---|---|
| 3rd highest median income | Highest property taxes in US |
| Access to NYC and Philly job markets | 10.75% top income tax rate |
| Top 3 public schools nationally | 120 COL index |
| Diverse economy and job market | Traffic and commuting costs |
| Strong worker protections and benefits | High auto insurance rates |
Related: Cost of Living by State | State Income Tax Rates | Property Tax by State
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