Each year, legal and regulatory changes can impact everything from the amount of payroll taxes you have to pay and your withholding requirements to minimum wage and deductions for certain benefits—complicating an already challenging task. Here’s what you need to know to ensure correct calculations this year.
- Minimum Wage: While the federal rate remains unchanged since 2009, many state and local rates are higher this year so be sure to check the laws where you do business. For a list of states with updated wage requirements, click here.
- Social Security: In the fall of 2018, the Social Security Administration adjusted the wage base used to calculate the Social Security portion of payroll taxes. In 2019, that amount is now $132,900 so taxable wages up to that figure will be subject to the Social Security tax of 6.2%.
- Medicare: The tax rate for Medicare taxes remains the same for this year as does the withholding for the additional Medicare tax on high earners.
- Retirement Plans: The limits for qualified retirement plan salary reduction contributions have increased for 2019. Find the IRS cost-of-living adjustments here.
- Unemployment Taxes: Employers are required to pay unemployment insurance on both a federal and state level. While the federal unemployment tax, known as FUTA, is still 6% assessed on the first $7,000 in wages, state rates are set each year in the fall with effective dates of January 1 so check your local requirements.
- Transportation Benefits: For 2019, the maximum amount that employees can receive tax-free for transportation benefits is $265 a month.
- HSAs: If you contribute to employees’ qualified Health Savings Accounts (HSAs), the amount that’s tax-free to employees and exempt from employment taxes for this year is $3,500 for individuals and $7,000 for families.
For more information about making sure your payroll is accurate, contact us at 866-658-8800.