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To comply with recent legislation approved by the United States Congress, employers need to begin withholding more social security tax from their employees’ wages. For 2013, the employee tax rate for social security is increasing to 6.2%. For the last 2 years, the rate has been 4.2%. The social security wage base limit is also increasing to $113,700 (the social security tax is not applied to payroll above this amount).
The IRS is advising employers to begin withholding social security tax at the rate of 6.2% of wages paid as soon as possible, but not later than February 15, 2013. After implementing the new 6.2% rate, employers should make an adjustment in a subsequent pay period to correct any under-withholding of social security tax as soon as possible, but not later than March 31st.
Please note: the employer tax rate for social security remains unchanged at 6.2%. Also, the Medicare tax rate is 1.45% each for the employee and the employer, the same as 2012. There is no wage base limit for Medicare tax.
In addition to withholding Medicare tax at 1.45%, employers must now withhold a 0.9% Additional Medicare Tax from wages paid to an employee in excess of $200,000 in a calendar year. This Additional Medicare Tax is only imposed on the employee; there is no employer share.
>> Click here to read more on the IRS website on their Guidance on Updated Withholding for 2013. <<
Published: 01/10/2013
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