Thursday, January 3, 2013

2013 Social Security Tax Increase


As you may have already heard, part of the tax changes taking effect for 2013 include an increase to the Social Security tax (Fed OASDI/EE as it is stated on your North Shore-LIJ pay statement.) 

In 2012, the Social Security tax had been lowered to 4.2% based on a payroll tax cut that expired Dec. 31, 2012, and it was determined by the government to not be extended further.

Social Security will now be taxed at 6.2% on annual earnings for salaries up to $113,700. 

How does this impact me?
To determine how you are personally taxed, simply take your annual pay and multiply it by 6.2%.  For example:  an employee making $35,000 annually would multiply 35,000 × .062 for a total of $2,170 in 2013.  The previous tax would be 35,000 × .042, for a total of $1,470.

Calculate your Social Security tax:  (salary × .062) = the amount withdrawn in 2013

Salary
Amount Withdrawn in 2013
Amount Withdrawn in 2012
$35,000
$2,170
$1,470
$50,000
$3,100
$2,100
$65,000
$4,030
$2,730
$90,000
$5,580
$3,780
$113,700 (maximum)
$7,049
$4,775

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