Photo courtesy of Nick TranSan Diego Chapter
American Payroll Association 

2012 Federal & CA Updates

Social Security and Medicare Tax for 2012

 

The social security wage base for 2012 is $110,100. The tax rate remains 4.2% for social security and 1.45% for Medicare tax for employees and employers. There is no wage base limit for Medicare tax.

 

Social Security Recipients allowable wage without forfeiting SS benefits

 

Tax Rate

2011

2012

Employee

 7.65%

 7.65%

Self-Employed

15.30%

15.30%

NOTE: The 7.65% tax rate is the combined rate for Social Security and Medicare. The Social Security portion (OASDI) is 6.2% on earnings up to the applicable taxable maximum amount (see below). The Medicare portion (HI) is 1.45% on all earnings.

 * Section 601 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 reduced, for wages and salaries paid in calendar year 2011 and self-employment income in calendar year 2011, the OASDI payroll tax by 2 percentage points, applied to the portion of the tax paid by the worker and the self-employed individual.

 

Maximum Earnings Taxable:

2011

2012

Social Security (OASDI only)

$106,800

$110,100

Medicare (HI only)

No Limit

Federal Unemployment Tax (FUTA)

 

The FUTA tax rate is 6.0% of taxable wages as of

July 1, 2011. The 0.2% surtax that was added in 1976 expired on June 30, 2011. The taxable wage base is the first $7,000 paid in wages to each employee during a calendar year. Employers who pay the state unemployment tax, on a timely basis, will receive an offset credit of up to 5.4% regardless of the rate of tax they pay the state. Therefore, the net

federal tax rate is generally 0.6% (6.0% - 5.4%). This would equate to a maximum of $42.00 per employee, per year (.006 X $7,000. = $42.00) in federal tax. State tax rates are based on requirements of state law.

Federal Minimum Wage:  

Federal Minimum Wage:   $7.25

 

Standard Mileage Rates

 

Effective January 1, 2012, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:

  • 55.5 cents per mile for business miles driven;
  • 23 cents per mile driven for medical or moving purposes; and
  • 14 cents per mile driven in service of charitable organizations

The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. Runzheimer International, an independent contractor, conducted the study for the IRS.

 

Per Diem Rates Change

 

The new per diem rates are available on their website at:

http://www.gsa.gov/portal/category/21287

 

 

Pension Plans (for year 2012)

 

Increase in IRS Maximum Pension Contribution Amount for 2012


The 402(g) limit changed from $16,500 to $17,000 for Employee Contributions.

The 401(a) limit increased from $245,000.00 to $250,000.00 for wage base.

 

Voluntary Catch-Up Contributions for Eligible Participants

Effective

January 1, 2012the IRS annual limit for the additional, voluntary Catch-Up contributions to the Supplemental Plan will remain at $5,500 for eligible participants.  Under IRS rules an employee is eligible to make a Catch-Up contribution, only if

  • Employee will be age 50 or older by December 31, 2012, and
  • Employee contributes the regular maximum employee contribution of $17,000 in 2012

CaliforniaEmployment Tax Rates for 2012

The UI rate schedule in effect for 2011 is Schedule "F+." This is Schedule F plus a 15 percent emergency surcharge, rounded to the nearest tenth. Schedule "F+" provides for UI contribution rates from 1.5% to 6.2%. The taxable wage limit is $7,000 per employee. For more information about how your UI rate is determined, see Information Sheet: California System of Experience Rating (DE 231Z). 

State Disability Insurance (SDI) The State Disability Insurance (SDI) withholding rate for 2011 is 1.2%. The SDI taxable wage limit is $93,316 for each employee per calendar year 2011. The maximum to withhold for each employee is $1,119.79.

*2012 SDI withholding rate has not yet been released.

2012 SDI/PFL Benefit Amounts

DE 2588 - Rev. 4 (1-08) - State Disability Insurance (SDI) and Paid Family Leave (PFL) Weekly Benefit Amounts

DE 2589 - Rev. 1 (1-08) - State Disability Insurance (SDI) and Paid Family Leave (PFL) Weekly Benefit Amounts in Dollar Increments

 

CaliforniaMinimum Wage

CaliforniaMinimum Wage: January 1, 2012- $8.00

 

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