A new provision will effect your employees' paycheck calculations beginning with your first payroll of 2011 and ending December 31st, 2011.

The new law is regarding Social Security Payroll Tax on individual wages.  The rate is lowered 2% , from 6.2% to 4.2% on wages up to $106800. The employee portion of the medicare 1.45 remains unchanged, effective January 1st, 2011.  For example, for an employee with wages of $30,000., this amounts to a $600. savings per year.

Self employed also get a similiar reduction on self employment income.

Please note the employer's portion of Social Security tax does not change, it stays at 6.2% plus 1.45% to a total of 7.65%.

Example of Fica calculation for employee wage of $600.

                 Social security tax:                           4.2%        $25.20

                 Social security medicare tax:           1.45%         8.70

                  Total social security tax:                  5.65%      $33.90

As the New Year approaches, check back here for announcements and please call if you have any questions.  Once again, here is my contact information:

Email: howard@howardjnitkinco.com

 Website: http://howardjnitkinco.com/

 Telephone: 

(203) 250-1040

 Fax: 

(203) 250-1041 

Howard