Did you know your employees are getting a raise in January?
Employees will soon see their paychecks increase pursuant to one of the lesser publicized provisions of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (better known as the Tax Relief Act of 2010 (HR 4853, PL 111-312)). Currently, both employers and employees pay 6.2 percent of an employees gross wage to Social Security taxes, but the Tax Relief Act of 2010 reduced the employees portion to 4.2 percent for one year, beginning in January 2011. The employers contribution portion will remain 6.2 percent. Employers must begin the reduced Social Security tax withholding no later than January 31, 2011. Review IRS Notice 1036 for details on the percentage method tables for 2011 income tax withholding or contact your tax adviser for more information.