Starting a house cleaning company in New Jersey: tax, labor and registration

This page covers only what changes when you start a house cleaning company in New Jersey. Service menus, equipment and finding customers are in the national cleaning startup guide. New Jersey is different because it taxes the service, because its labor rules are tight for any cleaner you hire, and because its home improvement registration law sits close to your trade.

Sales tax: cleaning is taxable and you collect it

New Jersey's sales tax rate is 6.625 percent. The Division of Taxation's Sales Tax Guide (S&U-4) lists "Cleaning Services (janitorial)" as taxable and carpet cleaning as taxable. It lists residential chimney sweeping as exempt, which is the kind of odd line item you only find by reading the list.

The Division's contractor bulletin (S&U-3, revised May 2025) adds a rule that applies to you. It says certain service providers who work on, but do not alter, real property, such as janitorial or cleaning services, are not considered contractors for New Jersey sales tax. Those businesses charge customers sales tax on the total amount of the bill, and can issue a resale certificate to buy certain materials and supplies used on the job without paying tax. A painter or fence builder follows different, more complicated rules, so keep your invoices simple: one cleaning charge, plus tax on the whole bill.

To collect tax you register with the state. The Division of Taxation's registration is Form NJ-REG, which it asks you to complete at least 15 business days before you start. After that you file Form ST-50 each quarter, even when you collected nothing, according to the Division. Our general guide on sales tax on services covers invoice layouts.

Setting up the LLC

New Jersey LLCs are formed with the Division of Revenue and Enterprise Services. Two official fee figures exist. The registry fee schedule lists the certificate of formation at $100 in October 2026, while the Division's Public Records Filing instructions list $125 for most domestic entities. Budget $125 and confirm the total on the payment screen. Every LLC then files an annual report, due by the last day of the month in which you formed, and the fee is $75 on the fee schedule. Our New Jersey startup guide walks through each step, and LLC versus sole proprietor helps you decide whether the LLC makes sense for a one-person cleaning route.

Pay and paid sick leave for your cleaners

This is where a New Jersey cleaning company's cost structure changes the most. Two rules apply from your first hire.

The state minimum wage rose to $15.92 an hour on January 1, 2026 for most employees, according to the Department of Labor. The rate for seasonal and small employers rose to $15.23 and keeps climbing gradually through 2028. Check the Department's definition of a small employer before you set pay, and do not assume you qualify.

The Earned Sick Leave Law applies to employers of any size. Employees earn one hour of leave for every 30 hours worked, with a 40 hour cap per benefit year, or you can advance 40 hours at the start of the year. Full-time and part-time workers are covered. You must give each employee written notice of their rights, you cannot retaliate for using the leave, and the notice must state your benefit year. For a cleaning company that sends two or three people to a house, one sick call can mean a canceled job, so build the cost into your rates. Our house cleaning pricing guide covers how.

Subcontractor cleaners: the ABC test

Many new cleaning owners hand work to "independent" cleaners. In New Jersey that is risky. The Department of Labor says a worker is an employee unless all three parts of the ABC test are met: the worker is free from control or direction in the work and in fact, the work is outside the usual course of your business or performed outside all of your places of business, and the worker is customarily engaged in an independently established trade or business. The employer has the burden to prove all three.

For a company whose business is cleaning houses, the second prong is hard to meet when you hire someone to clean houses. NJDOL announced on May 5, 2026 that it adopted regulations explaining how the test applies under the unemployment, wage and hour, and wage payment laws, and says they become operative on October 1, 2026. A 1099 alone does not decide it. Read our guide on employee versus independent contractor, then assume W-2 employees unless a lawyer or accountant advises you otherwise.

Workers' compensation is required

New Jersey makes coverage mandatory based on who works for you. An LLC must carry coverage once anyone other than its members works for it for pay. The Department of Labor lists penalties for going without, including a disorderly persons offense and, if willful, a fourth-degree crime, with penalties of up to $5,000 for the first ten days and for each additional ten-day period. Buy a policy before the first employee starts.

Does home improvement registration apply to cleaning?

Possibly not, but you should ask. The Division of Consumer Affairs requires businesses that repair, renovate, paint, remodel or install on existing residential property to register as a Home Improvement Contractor Business. The Division's materials do not list house cleaning in the activities we read, and the Division's FAQ describes registration in terms of repair and improvement work. If you add services that look like repair, such as touch-up painting, caulking or minor fixes, you may cross the line. Call the Division of Consumer Affairs and ask for a written answer. Registration carries its own insurance and advertising rules, so ask the Division what applies before you rely on it either way.

Your first month, in order

1. Form the LLC, then register for tax with Form NJ-REG at least 15 business days before your first clean.
2. Decide who works for you as an employee, and set pay at or above $15.92 (or the small employer rate if you qualify).
3. Write an earned sick leave policy and give employees the written notice.
4. Buy workers' comp and general liability. See business insurance for contractors.
5. Show "plus 6.625% NJ sales tax" on your website, estimates and booking page. Our house cleaning industry page shows how a site and booking flow can carry it automatically.

This page is background, not legal or tax advice. Rates and rules change, so verify each item with the Division of Taxation, the Department of Labor and the Division of Consumer Affairs. Towns may add their own business license or permit rules, so ask the municipal clerk where you work.

Frequently asked questions