Payroll & Benefit Services update: New tax rates

There were a lot of unknowns regarding what would happen with payroll taxes in 2013 due to the “fiscal cliff” that we heard about in the news. Payroll & Benefit Services (PBS) kept a close eye on the developments in order to ensure that our employees are going to be taxed in accordance with the current guidance provided from the federal government. 

In regards to the federal payroll withholding tax tables: we have received guidance from the IRS via the American Payroll Association to continue to use the 2012 payroll federal withholding tax tables until further direction is given. What this means is that your federal tax withholding will not change until new tax tables are released from the IRS. If and when the new tax tables are released, PeopleSoft/Oracle, our vendor that maintains the HRMS system, will supply us with the systematic changes that need to be made in order to change the tax tables within HRMS. PBS will update the tables timely in accordance with the direction given to us by the federal government. 

One of the other big discussions is the employee’s portion of the social security tax rate. This rate has been restored to 6.2% (it was 4.2%) beginning Jan. 1, 2013. We have updated our system accordingly. This change will impact all employees (non-students) that are not participating in the PERA retirement plan.

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