
On December 17, 2010, information was released by the IRS regarding 2011 “payroll tax cuts”. Throughout 2011, the “employee tax rate” for Social Security contributions will be 4.2%, however the employer tax rate for Social Security will remain unchanged at 6.2%. The maximum income subject to Social Security tax will also remain unchanged from 2010, at $106,800, but the maximum Social Security tax that can be withheld from an employee’s paycheck for 2011 will be lowered to $4,485.60 in accordance with the 4.2% tax rate. Furthermore, the Employee and Employer Medicare tax factor will be unchanged at 1.45% with no maximum cutoff. Because the tax information has been released at a late date, the IRS has given businesses until January 31, 2011 to comply with the new 4.2% Social Security tax rate.
If you currently utilize the services of a PEO, please contact your Payroll Associate. IF you are interested in learning more about how a PEO can assist your company with Payroll, HR, Benefits, Risk Management or other employee administration matters please contact the LL Roberts at 877.878.6463.