All-items parity
108.8
US = 100.0
New Jersey (NJ) | All-items parity 108.8
New Jersey Cost of Living 2026
New Jersey reads 108.8 on the BEA all-items price parity for 2024, one of the most expensive states in the country, with housing rents pricing at 134.3 against the national 100.6. The defining number is property tax: a 2.23% effective rate, the highest in the US, which pushes the typical annual bill toward $10,000 in much of the state. What you get in exchange is proximity to two major job markets (New York and Philadelphia), top-ranked public schools and a median household income of $104,294.
Property tax 2.23%, US highestTop income bracket 10.75%Clothing exempt from sales tax
Median Home
$496,000
2BR rent $1,885/mo
Median Income
$104,294
Household, Census ACS
Category breakdown
The four BEA price parities vs the nation
| Category | NJ index | National avg | Difference |
|---|---|---|---|
| All items | 108.8 | 100.0 | 8.8% |
| Services: housing rents | 134.3 | 100.6 | 33.5% |
| Goods | 107.1 | 99.6 | 7.5% |
| Services: utilities | 114.2 | 98.4 | 16.1% |
| Services: other | 103.5 | 100.1 | 3.4% |
U.S. Bureau of Economic Analysis publishes these four component parities and no others. There is no federal grocery, healthcare or transportation price parity, so this table shows none. Food at home sits inside Goods; medical and transport services sit inside Services: other.
Sources: BEA Regional Price Parities by State (table SARPP), 2024 reference year, U.S. Bureau of Economic Analysis. Census ACS 2024 1-year (median income, home value), NJ Division of Taxation (income and sales tax), Tax Foundation (effective property tax), EIA (electricity rates), KFF (uninsured rate).
Moving to New Jersey?
The cost of the move itself belongs in the comparison. Describe your move once on Angi and get matched with local and long-distance movers to compare real quotes, free and with no obligation.
Partner link: we earn a commission if you submit a request through it. It has no effect on any figure or ranking on this site.
Pros / offsets
What works in New Jersey.
Two job markets, one address. North Jersey commutes into Manhattan via NJ Transit and PATH; South Jersey commutes into Philadelphia. Household incomes reflect it: the $104,294 median is among the highest of any state, and many NJ residents earn New York salaries while avoiding New York City's own income tax, which only applies to city residents.
Social Security untaxed, pensions lightly taxed. New Jersey does not tax Social Security benefits, and its pension exclusion lets couples with moderate retirement incomes exclude a substantial amount of pension and IRA income from state tax. For retirees the income-tax picture is far friendlier than the 10.75% top bracket suggests.
Clothing and groceries escape sales tax. The 6.625% state sales tax does not apply to most clothing, footwear or unprepared food, a meaningful exemption for families that neighboring New York does not fully match.
Public schools that justify part of the bill. New Jersey consistently ranks at or near the top of national K-12 rankings. Families paying $12,000 in property tax in a strong district are, in effect, pre-paying private-school tuition; whether that trade works depends entirely on whether you use the schools.
Cons / drivers
Where New Jersey costs more.
The property tax is the headline and the problem. At 2.23% effective, the highest in the nation, the tax on the $496,000 median home is roughly $10,500 a year, and bills over $15,000 are routine in Bergen and Essex commuter towns. State relief programs (ANCHOR, Senior Freeze) blunt the edge for some households but do not change the structural level.
Housing costs compound the tax. The housing parity of 134.3 is driven by the New York commuter belt, where modest three-bedroom homes commonly exceed $600,000. Add the property tax and carrying costs on a North Jersey home are among the highest in the country.
A genuinely progressive, genuinely high income tax. Brackets run from 1.4% to 10.75% above $1 million. Most middle-income households land in the 5.525% or 6.37% brackets, which stacked on federal tax and the property bill makes total burden the real story.
Insurance and congestion costs. Auto insurance premiums in dense North Jersey are persistently among the highest in the US, and toll spending (Turnpike, Parkway, Hudson crossings) is a real monthly line item for commuters that no cost index fully captures.
Tax + benefit signals
New Jersey tax and access overview
State income tax
1.4-10.75%
Graduated or flat
Property tax effective
2.23%
Of assessed value, annual
Sales tax (state)
6.63%
Local can add 1-4% more
Uninsured rate
7.5%
Medicaid: expanded
Your take-home pay in New Jersey
Federal, New Jersey and any local income tax on your salary, per paycheck.
The mortgage on a $496,000 home
Monthly payment at today’s rates with New Jersey property tax (2.23%) and average home insurance.
Metro variation
State averages mask city variation.
New Jersey averages 108.8 on the BEA all-items parity, but the state splits into three bands:
North Jersey commuter belt (Bergen, Essex, Hudson, Morris): The most expensive band. Hoboken and Jersey City price like outer-borough New York; suburban Bergen County combines $700,000+ homes with five-figure property-tax bills.
Central Jersey (Middlesex, Somerset, Monmouth): Close to the state average, with the Shore towns carrying a seasonal premium. Princeton and the pharma corridor push pockets well above it.
South Jersey (Camden, Gloucester, Burlington): The affordable third. Median homes in the $250,000 to $350,000 range, Philadelphia wages a bridge away, and property-tax bills that look modest only by New Jersey standards.
Statewide averages mask that band structure; the same salary supports a very different life in Cherry Hill than in Montclair.
Frequently Asked
New Jersey cost of living, answered
Why are New Jersey property taxes the highest in the country?
New Jersey funds its schools and services primarily through local property levies across more than 560 municipalities, most of which run their own police, schools and services at small scale. Strong school spending, high land values in the New York and Philadelphia commuter belts, and limited consolidation keep the effective rate at 2.23% per the Tax Foundation. On the median $496,000 home that is roughly $11,000 a year, and well over $15,000 in many Bergen and Essex towns.
Does New Jersey tax Social Security or pensions?
Social Security is fully exempt from New Jersey income tax. Pension and retirement-account income benefits from a pension exclusion for households below an income ceiling, which allows couples with moderate retirement incomes to exclude a large share of that income from state tax. The practical effect: New Jersey is harsher on high earners than on typical retirees, whose main exposure is the property-tax bill rather than the income tax.
Is it cheaper to live in New Jersey or New York?
For a Manhattan worker, New Jersey usually wins on taxes and space. New York City levies its own resident income tax of roughly 3 to 3.9% that NJ commuters avoid, and per-square-foot housing in Hudson County is well below Manhattan or brownstone Brooklyn. New Jersey counters with the nation's highest property tax, so renters capture more of the arbitrage than owners. Run both on the /calculator with your own salary and housing plans.
How does the 10.75% top tax bracket work?
The 10.75% rate applies only to taxable income above $1 million; it is the so-called millionaires tax. Below that, brackets step through 1.4%, 1.75%, 3.5%, 5.525%, 6.37% and 8.97%. A household earning $150,000 pays an effective state rate of roughly 4 to 5%, far below the headline number that makes the news.
What does it actually cost to commute from NJ to Manhattan?
Budget realistically: a monthly NJ Transit rail pass from the Bergen or Morris commuter belt typically runs $250 to $450 depending on zone, PATH from Hoboken or Jersey City is cheaper, and driving adds Hudson crossing tolls of roughly $14 to $18 per round trip at peak plus parking. For a five-day commuter that is $3,500 to $6,000 a year, a line item worth including in any NJ-vs-NY comparison.
How do New Jersey grocery and utility costs compare?
BEA does not publish a grocery parity; food sits inside the goods parity, which reads 107.1 for New Jersey against a national 99.6, and unprepared groceries are exempt from sales tax. Household spending averages $420 a month. Utilities price at 114.2 on the parity, with an average electric bill of $148 at 17.52 cents per kWh, high for the mid-Atlantic but nowhere near New England levels.