2013 Changes to Paycheck CalculationsJan 29, 2013, 07:09 pm - Becky Smith
2013 Changes to Paycheck Calculations
Some employees may notice variations to their January, 2013 paychecks due to some changes that were effective on January 1, 2013.
Social Security Tax Withholding
In 2011, the Federal Government lowered Social Security tax withholding rates temporarily by 2%. This was offered as temporary relief to families during the worst of the recession.
The reduced rate for employee Social Security taxes that was in effect for 2011 and 2012 has now expired. The employee Social Security tax rate will return to 6.2% for 2013 wages up to the taxable wage limit of $113,700. Employees will now contribute 2 percent more with each paycheck to fund Social Security. Consequently, employees’ net pay under the taxable wage limit will decrease accordingly.
Federal Income Tax Withholding:
The American Taxpayer Relief Act effectively maintains the reduced income tax rates adopted in 2001 and 2003 for individuals earning up to $400,000 and families earning less than $450,000. Income above those levels will be taxed at 39.6%, up from 35%. The expanded 15% bracket for joint filers, commonly referred to as the marriage penalty relief, has also been extended.
Very few employees will be impacted by these changes.
State Tax Withholding:
Georgia has not announced any significant changes to employee’s tax withholdings for the State of GA
Teachers Retirement System (operates on fiscal year)
There are no changes effective January 1, 2013. The employee contribution rate increased to 6.00 % back on 07/01/12.
Optional Retirement Plan (operates on calendar year)
Effective January 1, 2013, the employee contribution rate increased to 6.00%
2013 Benefits Enrollment
Many voluntary benefits election changes go into effect on January 1, 2013. These selections can in some cases impact some tax withholding and net pay.
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