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SOURCE: Allstaff HR Group
HR Strategies explains that the End of the "Payroll Tax Holiday" means less take home pay for all American workers.
Duluth, GA (PRWEB) January 11, 2013
In 2011 Congress enacted a “payroll tax holiday,” which reduced the employee share of the Social Security payroll tax from 6.2% to 4.2%, amounting to an annual income boost of approximately $1,000 for a typical U.S. family earning $50,000 per year. The tax holiday was renewed for the year 2012, but was not extended for the year 2013.
Beginning on January 1st, 2013 the Social Security payroll tax has been returned to the historical level of 6.2%. Note that this is not a new increase on taxes, rather the end of a nice break that we had received. The holiday is over, and the rates are now going back to normal.
So what does this mean to you and your paycheck?
As of January 1, 2013, all Americans who earn wage income will pay an additional 2% in Social Security payroll tax. Essentially, this will mean that all employees will see 2% less take-home pay starting with their January paychecks. The end of the payroll tax holiday affects all Americans equally.
About HR Strategies
HR Strategies provides the customizable HR solutions (including but not limited to payroll, benefits, workers compensation, tax administration, regulatory compliance, HR consulting, training solutions) and expertise of a large corporation's personnel department in an affordable and effective solution. HR Strategies enables clients to reclaim time, stabilize and reduce labor costs, and stay compliant with government regulations.
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