Changes for 2013
Payroll Tax Rate
The Social Security Administration (SSA) has announced that the 2013 social security wage base will be $113,700, an increase of $3,600 from the 2012 wage base of $110,100. However, the FICA tax rate will be changed to 6.2% for the employee portion to match with the employer portion. 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%, will change to 7.65% for 2013. The maximum social security tax that employees and employers will each pay in 2013 is $7,049.40. This is an increase of $2,425.20 from the 2012 maximum tax of $4,624.20.
California State Disability Tax
For 2013 the State Disability Insurance (SDI) taxable wage limit will be $100,880.00, an increase of $5,295.00 from the 2012 wage base of $95,585.00. The employee contribution rate will remain the same at 1.00% on annual earnings up to the wage base. The maximum tax withhold for California State Disability is $1,008.80.
Changes for 2012
Payroll Tax Rate
The Social Security Administration (SSA) has announced that the 2012 social security wage base will be $110,100, an increase of $3,300 from the 2011 wage base of $106,800. However, the FICA tax rate will be 4.2% through February 2012 and then it will be changed to 6.2% for the employee portion to match with the employer portion. 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 4.2% and the Medicare tax rate of 1.45%, will be 5.65% for January and February 2012. In March 2012 6.2% and the Medicare tax rate of 1.45%, will change to 7.65% for 2012. The maximum social security tax that employees and employers will each pay in 2012 is $6,826.20. This is an increase of $2,340.60 from the 2011 maximum tax of $4,485.60.
NOTE: Special Recapture Provision
Under the terms negotiated by Congress, the law includes a new recapture provision in the event that the rate cut is not extended for the full year. This applies only to employees who receive more than $18,350 in wages during the two-month period, or 2/12 of the annual wage base of $110,100.
The recapture tax would be payable in 2013 by the employee when filing an individual tax return for the 2012 tax year.
IRS plans to issue additional guidance if needed to implement the provisions of the two-month extension, including revised employment tax forms and instructions, and information for employees who may be subject to the new recapture provision. For most employers, the quarterly employment tax return for the quarter ending March 31, 2012, is due April 30, 2012.
As part of the agreement that led to passage of the bill, Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) named senators to a House-Senate conference committee to negotiate a package that would extend the payroll tax cut through 2012.
IRS officials said they plan to monitor negotiations in case future legislation changes the recapture provision.
Looking ahead to March 1, if Congress merely changes the rate to 6.2 percent from 4.2 percent and the wage base remains $110,100, a smooth transition would result for payroll professionals, Basehore said. Complications could arise, however, if lawmakers change the wage base, he said.
California State Disability Tax
For 2012 the State Disability Insurance (SDI) taxable wage limit will be $95,585, an increase of $2,269 from the 2011 wage base of $93,316. The employee contribution rate will reduce to 1.00% from 1.20% of annual earnings up to the wage base. The maximum tax withhold for California State Disability is $955.85.
Changes for 2011
Payroll Tax Rate
The Social Security Administration (SSA) has announced that the 2011 social security wage base will remain the same as 2010 which is $106,800. However, the FICA tax rate will change to 4.2% for the employee portion only. 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 4.2% and the Medicare tax rate of 1.45%, will change to 5.65% for 2011. The maximum social security tax that employees will pay in 2011 is $4,485.60 and employers will pay in 2011 is $6,621.60.
California State Disability Tax
For 2011 the State Disability Insurance (SDI) taxable wage limit will be $93,316.00 which is the same as wage base for 2010. The employee contribution rate will increase to 1.2% from 1.1% of annual earnings up to the wage base. The maximum tax withhold for California State Disability is $1,119.80.
Changes for 2010
Payroll Tax Rate
The Social Security Administration (SSA) has announced that the 2010 social security wage base will remain the same as 2009 which is $106,800. 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 2010. The maximum social security tax that employees and employers will each pay in 2010 is $6,621.60.
California State Disability Tax
For 2010 the State Disability Insurance (SDI) taxable wage limit will be $93,316.00. An increase of $2,647.00 from the 2009 wage base of $90,669.00. The employee contribution rate will be 1.1% of annual earnings up to the wage base. The maximum tax withhold for California State Disability is $1,026.48.
Changes for 2009
Payroll Tax Rate
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.
Changes for 2008
Payroll Tax Rate
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.
Changes for 2007
Payroll Tax Rate
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.
