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With the dawn of 2013 came the end of the two percent United States Social Security income tax reprieve for employees.
What few news outlets have failed to emphasize, and consequently many employees have not fully grasped, is that:
– employers did not receive the same reprieve and continued to be taxed at the standard 6.2 percent for Social Security while employees enjoyed the two percent reprieve.
– the two percent drop for employees was temporary, even if the hope was that the government would extend the reprieve.
All employers were, and still are, required to pay 6.2 percent on employee wages up to the annual limit as set each year by the SSA.
The Social Security tax reprieve for employees was never intended to be permanent. Communicating this to questioning employees is an important step in fiscal education about payroll taxation and the role employers play in funding government benefits for the workforce.
Need help educating your employees about payroll-related taxes, their actual cost to your company, and total compensation? Contact EctoHR at 810.534.0170, or send an email to firstname.lastname@example.org