Tax Rate Changes

Payroll Tax Rate Changes for 2009

The Social Security Administration (SSA) has announced that the 2009 social security wage base will be $106,800, an increase of $4,800 from the 2008 wage base of $102,000. As in prior years, there is no limit to wages subject to the Medicare Tax; therefore, all covered wages are still subject to the 1.45% tax.
The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2009. The maximum social security tax that employees and employers will each pay in 2009 is $6,621.60. This is an increase of $297.60 from the 2008 maximum tax of $6,324.

California State Disability Tax

For 2009 the State Disability Insurance (SDI) taxable wage limit will be $90,669, an increase of $3,971.00 from the 2008 wage base of $86,698. The employee contribution rate will increase to 1.1% from 0.80% of annual earnings up to the wage base.  The maximum tax to withhold for California State Disability is $997.36.

Payroll Tax Rate Changes for 2008

The Social Security Administration (SSA) has announced that the 2008 social security wage base will be $102,000, an increase of $4,500 from the 2007 wage base of $97,500. As in prior years, there is no limit to wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45% tax.
The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2008. The maximum social security tax that employees and employers will each pay in 2008 is $6,324. This is an increase of $297 from the 2007 maximum tax of $6,045.

California State Disability Tax

For 2008 the State Disability Insurance (SDI) taxable wage limit will be $86,698, an increase of $3,309 from the 2007 wage base of $83,389 The employee contribution rate will increase to 0.80% from 0.60% of annual earnings up to the wage base.  The maximum tax to withhold for California State Disability is $693.58.

 

Payroll Tax Rate Changes for 2007

The Social Security Administration (SSA) has announced that the 2007 social security wage base will be $97,400, an increase of $3,200 from the 2006 wage base of $94,200. As in prior years, there is no limit to wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45% tax.

The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains at 7.65% for 2007. The maximum social security tax that employees and employers will each pay in 2007 is $6,038.80. This is an increase of $198.80 from the 2006 maximum tax of $5,840.

California State Disability Tax

For 2007 the State Disability Insurance (SDI) taxable wage limit will be $83,389, an increase of $3,971 from the 2006 wage base of $79,418. The employee contribution rate will decrease to 0.60% from 0.80% of annual earnings up to the wage base.  The maximum tax to withhold for California State Disability is $500.33.