Category «Payroll For Employees»

How the New Medicare Tax Will Effect Payroll For Employees

As per the new regulations, now the employers have to deduct 0.9% additional hospitality tax for the people who are falling in the category of High-Income taxpayers (commonly referred as additional Medicare tax). This new tax slab was adopted from 1st Jan 2013. Individuals, employers, and the payroll service providers all now have to re-work on their slabs in order to attain this new tax change. As per 2012, Federal Insurance Contributors Act (FICA) wages were subject to a 2.9% Medicare tax, which was bear by the company as well as the employees with the equal percentage of 1.45% each. Now, from the beginning of 2013, under the act of patient protection and affordable care; employees will have to accept an additional liability of 0.9% on FICA wages and self-employment income. The people who will fall under this categories are: $250,000 for joint fillers $125,000 for married taxpayers filing form separately (and) $200,000 for individuals who are household heads and other fillers. In comparison with the regular Medicare Tax, additional Medicare tax will not give any consideration to employer portion. However, employers will be obligated to suppress the additional tax for an employee whose wages exceed $200,000 in a calendar …