New Jersey vs Pennsylvania Taxes
Compare the total tax burden between New Jersey (1.4% – 10.75%) and Pennsylvania (3.07% flat). Enter your income to see which state saves you more.
| Tax Component | New Jersey | Pennsylvania |
|---|---|---|
| Federal Tax | $13,170 | $13,170 |
| State Tax | $4,180 | $3,070 |
| FICA | $7,650 | $7,650 |
| Total Tax | $25,000 | $23,890 |
| Take-Home | $75,000 | $76,110 |
| Effective Rate | 25.00% | 23.89% |
| Annual Difference | $1,110 more | $1,110 less |
The $1,110 difference is primarily because New Jersey has a progressive income tax with rates up to 10.8%, while Pennsylvania has a flat 3.1% income tax. At your income level, New Jersey's marginal rate is 6.4% vs Pennsylvania's 3.1%.
Why the difference
You'd save $1,110/year ($93/month) in Pennsylvania vs New Jersey.
Tax structure
New Jersey uses progressive brackets up to 10.8%, while Pennsylvania has a flat 3.1% state income tax.
Effective rate at your income
At $100,000, Pennsylvania's effective state rate is 3.1% vs 4.2% in New Jersey — a 1.1 percentage point gap.
Pennsylvania local taxes
Many Pennsylvania municipalities levy an earned income tax (typically 1-3%); Philadelphia wage tax is 3.75% for residents.
Tip: New Jersey's combination of high income tax and nation-leading property taxes creates a substantial tax burden. If you work in NYC, note that NJ residents receive a credit for taxes paid to NY, but the NJ/NYC tax interaction can be complex — ensure proper credit on your NJ return.
Tip: PA's low flat rate benefits high earners, but the Philadelphia wage tax adds significantly for city workers. If you live outside Philadelphia but work in the city, the non-resident wage tax is 3.44%. PA's exemption of retirement income makes it attractive for retirees.
New Jersey Total Tax
$25,00025.00% effective rate
Pennsylvania Total Tax
$23,89023.89% effective rate
Annual Savings
$1,110by living in Pennsylvania
New Jersey vs Pennsylvania: The Delaware River tax divide
New Jersey and Pennsylvania share the most heavily trafficked tax border in the Northeast. Over 100,000 workers cross the Delaware River daily between the two states, and the tax implications of which side you call home are substantial. New Jersey's progressive income tax tops out at 10.75% on income above $1 million, while Pennsylvania charges a flat 3.07% on all income—one of the lowest rates east of the Mississippi.
For most working families, Pennsylvania is the clear income tax winner. A household earning $150,000 pays roughly $5,400 in New Jersey income tax versus $4,605 in Pennsylvania—an $800 annual gap. At $300,000, the difference grows to about $5,700. But property taxes complicate the picture: New Jersey's effective rate of 2.11% is the highest in the nation, while Pennsylvania's average of 1.30% is also above the national average. Both states impose significant property tax burdens, but New Jersey is consistently worse.
The cross-border commuter dynamic adds another wrinkle. New Jersey and Pennsylvania have a reciprocal tax agreement: you pay tax only in your state of residence, regardless of where you work. This makes the comparison clean—if you work in Philadelphia but live in Cherry Hill, NJ, you pay New Jersey rates. If you live in Bucks County, PA, and work in Trenton, you pay Pennsylvania's 3.07%. For workers whose jobs are accessible from either side of the river, Pennsylvania residency almost always wins on pure tax math.
Key Differences Beyond Income Tax
| Category | New Jersey | Pennsylvania |
|---|---|---|
| Property Tax | Highest in the nation at ~2.23%; median annual bill exceeds $9,000 | Effective rate ~1.35%; also above average but significantly less than NJ |
| Income Tax Structure | Progressive 1.4%-10.75% with 7 brackets; top rate on income above $1M | Flat 3.07% on all taxable income; one of the simplest state tax codes |
| Sales Tax | Flat 6.625% statewide; all clothing exempt; no local additions | Base rate 6%, up to 8% in Philly/Allegheny; clothing and most groceries exempt |
| Inheritance/Estate Tax | No state estate tax (repealed 2018); inheritance tax up to 16% applies only to non-lineal beneficiaries — spouses, children, parents, and grandchildren are exempt | Inheritance tax: 4.5% to children, 12% to siblings, 15% to others; no estate tax |
| Commuter Tax Reciprocity | Reciprocal agreement with PA: NJ residents pay NJ tax on income earned in PA | Reciprocal agreement with NJ: PA residents pay PA's 3.07% on income earned in NJ |
Who Benefits from Moving?
Philadelphia-area workers choosing a side of the river
A family earning $150,000 saves about $800 per year in income tax by living in Pennsylvania versus New Jersey. Add the property tax savings on a $400,000 home (~$2,960/year), and the total savings approach $3,750 annually. Bucks County and Montgomery County offer school quality comparable to top NJ suburbs.
High earners above $500K
At $500,000 income, New Jersey's progressive rates push the tax to roughly $34,000 versus Pennsylvania's $15,350—a $18,650 gap. This is one of the largest income-tax savings available for a same-metro move anywhere in the country.
Families focused on estate planning
New Jersey has no state estate tax (repealed 2018), and its inheritance tax exempts children entirely (Class A beneficiaries) — a $2 million estate passing to children owes $0 in NJ. Pennsylvania taxes that same transfer to children at 4.5%, or $90,000. NJ's inheritance tax only bites for non-lineal heirs: a sibling would owe 11%-16%, which can exceed Pennsylvania's 12% sibling rate depending on the estate size.
Bottom line: At $150,000 income, Pennsylvania's flat 3.07% saves about $800 over New Jersey—and when you add property tax savings on a typical home, the annual advantage of living on the Pennsylvania side of the Delaware approaches $3,800.
Tax at Different Income Levels
| Income | New Jersey Total Tax | Pennsylvania Total Tax | Annual Savings |
|---|---|---|---|
| $75,000 | $16,004 | $15,710 | Save $294 |
| $100,000 | $25,000 | $23,890 | Save $1,110 |
| $150,000 | $43,574 | $40,814 | Save $2,760 |
| $200,000 | $61,623 | $57,213 | Save $4,410 |
Based on single filer, standard deduction, 2026 tax year. Includes federal income tax, state income tax, and FICA.
Why the difference
You'd save $1,110/year ($93/month) in Pennsylvania vs New Jersey.
Tax structure
New Jersey uses progressive brackets up to 10.8%, while Pennsylvania has a flat 3.1% state income tax.
Effective rate at your income
At $100,000, Pennsylvania's effective state rate is 3.1% vs 4.2% in New Jersey — a 1.1 percentage point gap.
Pennsylvania local taxes
Many Pennsylvania municipalities levy an earned income tax (typically 1-3%); Philadelphia wage tax is 3.75% for residents.
Tip: New Jersey's combination of high income tax and nation-leading property taxes creates a substantial tax burden. If you work in NYC, note that NJ residents receive a credit for taxes paid to NY, but the NJ/NYC tax interaction can be complex — ensure proper credit on your NJ return.
Tip: PA's low flat rate benefits high earners, but the Philadelphia wage tax adds significantly for city workers. If you live outside Philadelphia but work in the city, the non-resident wage tax is 3.44%. PA's exemption of retirement income makes it attractive for retirees.
Understanding Each State
New Jersey
New Jersey has progressive income tax brackets reaching 10.75% on income over $1 million. Combined with property taxes that are the highest in the US (average 2.23% of home value), New Jersey has one of the heaviest overall tax burdens nationally. However, NJ does not tax Social Security benefits.
Tip: New Jersey's combination of high income tax and nation-leading property taxes creates a substantial tax burden. If you work in NYC, note that NJ residents receive a credit for taxes paid to NY, but the NJ/NYC tax interaction can be complex — ensure proper credit on your NJ return.
Pennsylvania
Pennsylvania has a flat income tax rate of 3.07% — one of the lowest flat rates in the US. Some municipalities levy an additional earned income tax (typically 1-3%), and Philadelphia residents pay a 3.75% wage tax. PA does not tax retirement income (401k, IRA, Social Security).
Tip: PA's low flat rate benefits high earners, but the Philadelphia wage tax adds significantly for city workers. If you live outside Philadelphia but work in the city, the non-resident wage tax is 3.44%. PA's exemption of retirement income makes it attractive for retirees.
Key Comparison Points
Income tax structure: New Jersey has a progressive income tax (1.4% – 10.75%), while Pennsylvania has a flat income tax (3.07% flat).
Beyond income tax: State tax comparisons should also consider property tax rates, sales tax, and cost of living. A state with no income tax may have higher property or sales taxes that offset the savings.
SALT deduction cap: Under OBBBA, the 2026 federal SALT cap is $40,400, phasing out above $505,000 MAGI toward a $10,000 floor. This limits the federal tax benefit of living in a high-tax state, so the gross state tax difference remains close to the net difference for most earners — especially high earners inside the phaseout.
Frequently asked questions
Is it cheaper to live in New Jersey or Pennsylvania?
Based on income tax alone, Pennsylvania has a lower tax burden. At $100K income, you'd save $1,110 annually in Pennsylvania compared to New Jersey. However, total cost of living also depends on property taxes, sales taxes, and housing costs.
How much would I save moving from New Jersey to Pennsylvania?
A single filer earning $100,000 would save approximately $1,110 per year in total taxes by living in Pennsylvania instead of New Jersey. At $150,000 income, the savings change to $2,760 per year.
What is the income tax rate in New Jersey?
New Jersey has a progressive income tax with rates of 1.4% – 10.75%.
What is the income tax rate in Pennsylvania?
Pennsylvania has a flat income tax with rates of 3.07% flat.