Tuesday, January 15, 2013

Social Security Tax Adjustment for 2013 Expiration of the “Tax Relief Act”


In 2010, Congress passed a temporary measure to reduce the employee portion of the Social Security tax rate from 6.20% to 4.20%, effective January 1st 2011. This reduction did not impact the employer portion of the FICA tax charged on wages by the Federal Government. Though the reduction was not intended to be permanent, the cut was extended through the end of 2012.  As of January 1st 2013, the Social Security tax rate returned to 6.20% due to the expiration of the Tax Relief Act.

Employees will pay 6.20% towards Social Security tax (part of the FICA deduction) on wages earned up to $113,700 in 2013. Please note that the increased Social Security tax rate has been adjusted within our payroll system as of January 1, 2013.  Subsequently, all related payroll tax changes for your employees have been or will be reflected in the first payroll run for 2013.

If you have any additional questions regarding this payroll tax change, please contact our payroll department (toll free) at 877.878.6463.

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