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Social Security and Medicare Withholdings for 2013

There are some changes to certain aspects of an employee’s tax withholding for Social Security and Medicare coming in 2013. The below information is current as of November 7, 2012.

The Social Security taxable wage basis will increase from $110,100 to $113,700, and the employee Social Security tax rate will increase from 4.2% to 6.2%. The employee tax rate increase is caused by the expiration of the 2% employee tax decrease authorized in The Middle Class Tax Relief and Job Creation Act of 2012. In 2013 the most an employee will have withheld from their check for Social Security tax is $7,049.40. The employer match rate remains at the 2012 level of 6.2%.

There is no taxable wage base for Medicare, but there is an increase in the tax rate for those employees that make more than $200,000 per year. When an employee crosses the $200,000 threshold, the employee Medicare tax rate jumps from 1.45% to 2.35%. The employer match rate remains at a constant 1.45% regardless of the amount an employee earns.

Once again the above information is current as of November 7, 2012. There has been some discussion of extending the 2% employee Social Security tax decrease through 2013. The extension of this tax decrease would have to be passed by congress and signed by the President, so there is still a possibility that the information above could change.

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