As you are already likely aware, the US Congress previously enacted the Temporary Payroll Tax Cut Continuation Act of 2011. Recently, President Obama and Congress agreed to extend the 2011 payroll tax cut through February 29, 2012. What this means is that the “employee’s” OASDI portion of FICA taxes (i.e. Social Security tax contributions) will be calculated on and deducted from gross wages at a rate of 4.2% (a 2% reduction from the normal 6.2%). Please be aware that the “employer rate” is unchanged and will remain at 6.2%. The Medicare tax rate (portion of FICA taxes) of 1.45% (with no maximum cutoff) is not impacted for either employees or employers.
To assist you and your company in completing your company’s financial projections and calculating your employee administration costs for the New Year, here are a few of the key changes and updates for 2012:
· Social Security (OASDI) Wage Base……………………………….$110,100
· SUTA Wage Base – (Texas, other states will vary)……….….…$9,000
· Federal Minimum Wage (state min wage prevails if higher).….$7.25
· Mileage Rate (per mile, business use)…………………………….$0.555
· Maximum 401(k) Contribution………………………………….…..$17,000
· Catch-up 401(k) Limit for People Over 50 years of age…….….$5,500
Congress continues to debate whether or not to extend the Temporary Payroll Tax Cut Continuation Act of 2011 beyond February 2012, but there is no determination to do so thus far. Please continue to visit our Blog for future updates.
As a reminder, PEO clients receive continuous update and support related to employment tax regulations and obligations, as well as other regulatory changes. Contact the LL Roberts Group today and find out how a PEO can assist you with your employee administration needs and to ensure your company’s compliance with constantly changing laws and regulations. Call us (toll free) at 877.878.6463 and ask to speak with an LL Roberts Group PEO Consultant. We will be happy to provide you with a “no cost” and no obligation” PEO proposal.
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