January 11, 2013 STAFF

Payroll Tax Changes for 2013

To all John Carroll Employees:

On January 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012 (ATRA). While this law includes a number of changes to tax laws affecting payroll and employment tax administration in 2013, the following change will have the most immediate impact on your net pay in 2013:

Employee Social Security Tax Rate Returns to 6.2%

The reduced 4.2% rate for employee Social Security taxes that was in effect for 2011 and 2012 has expired. The employee Social Security tax rate will return to 6.2% for 2013 wages up to the taxable wage limit of $113,700. Consequently, employees’ net pay under the taxable wage limit will decrease accordingly. The maximum Social Security tax that an employee would pay will be $7,049.40 for 2013. The Employer Social Security tax rate is unaffected, and remains 6.2% of Social Security taxable wages paid.

Employee Social Security Tax Rate

Employer Social Security Tax Rate

Social Security Taxable Wage Base Rate

Maximum Employee Social Security Tax Paid











To understand how other ATRA changes might affect you, please contact your accountant or financial advisor.