New Year Brings Changes to Your Payroll
New Year Brings Changes to Your Payroll
For 2013 there will be changes to your payroll. Our payroll service, Ovation Payroll sent us the following summary as a guide for 2013.
Social Security
- The Social Security withholding rate is now reverted to the typical rate of 6.2% rather than the 4.2% for the tax years 2011 and 2012, the employer rate was not adjusted and remains at 6.2%
- The Social Security Wage Base Limit increases to $113,700. This translates to a maximum Social Security withholding of $7049.40 for each employee.
Medicare
- There is an additional Medicare Tax to be withheld from employees who earn more than $200,000 in taxable wages.
- The rate for wages up to $200,000 remains at 1.45%, while the rate for wages in excess of $200,000 will be 2.35%.
- The rate for employers remains constant at 1.45% on all taxable wages.
Flexible Spending Accounts
- The IRS has mandated a limit of $2,500 per employee on Medical FSA’s.
- The Dependent Care FSA limit remains at $5,000.
401K and Other Deferred Comp Plans
- The annual employee contribution limit for 401K, 403B, and most 457 plans increased from $17,000 to $17,500.
- The catch up contribution limit for employees over 50 is increased from $5,000 to $5,500.
Payroll is a rating basis for Connecticut Workers' Compensation and Connecticut Contractors General Liability policies. These changes do not affect how these premiums are calculated because they both use gross regular payroll figures.
