By Bob Romantic
GCU News Bureau
There’s no "fiscal cliff" to fall off of in 2013, but GCU employees will still notice a fairly significant change in their paychecks this year.
Like all American workers, GCU employees will see a 2 percent increase in their Social Security payroll taxes – a hike that will cost $83 a month for someone earning $50,000 a year.
The 2 percent increase is not a new tax, but rather the reinstitution of an old one. The payroll tax rate was dropped from 6.2 percent to 4.2 percent in 2010 as part of the stimulus package put forth by President Barack Obama and Congress.
That tax cut expired Jan. 1, meaning payroll taxes will revert to 6.2 percent.
What does that 2 percent hike mean to you? According to the Wall Street Journal's payroll tax calculator, a worker earning $50,000 will pay an additional $1,000 in payroll taxes this year, or about $83 per month.
So while the last-minute fiscal cliff deal by Congress last Tuesday avoided raising income taxes on 99 percent of Americans, most will find their taxes still will increase as a result of the Social Security payroll tax hike.
The Social Security tax is one of several payroll taxes Americans pay through their salaries, which also includes Medicare and unemployment insurance.
Wages up to $113,700 are subject to the Social Security tax.
The higher tax rate was less obvious in GCU employees' first paycheck of the year (Jan. 4) because that is one of two pay periods during the year in which there are no deductions for health and welfare benefits. GCU employees are paid 26 times a year, with benefits deductions occurring 24 times per year.
Benefits deductions begin on your Jan. 18 paycheck.
Contact Bob Romantic at 639.7611 or [email protected].
