According to the Social Security Online website, the Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits for 2012 will be increased to $110,100.This is a portion of the employment taxes charges to employers and employees alike often referred to as “FICA”. The OASDI tax rate for wages paid is set by statute at 6.2 percent for employees and employers, each. This limit changes each year with changes in the national average wage index. For earnings in 2012, the OASDI base is $110,100. Thus, an individual with wages equal to or larger than $110,100 would contribute $6,826.20 to the OASDI program in 2012.The OASDI tax rate for self-employment income in 2012 is 12.4 percent.
For Medicare’s Hospital Insurance program, there is no limitation on taxable earnings. Tax rates under the Medicare’s Hospital Insurance program are 1.45 percent for employees and employers, each, and 2.90 percent for self-employed persons.
PEOs assist clients by administering, calculating, and remitting employment taxes (such as FICA taxes) for their clients.To learn more about how a PEO can assist your company with it’s employment tax burden contact a PEO Consultant at the LL Roberts (toll free) at 877.878.6463.