(ALL INFORMATION PROVIDED IS CURRENT AS OF 02/23/2012)
TAXABLE EMPLOYER EMPLOYEE MAXIMUM MAXIMUM
FICA WAGE BASE TAX RATE TAX RATE EMPLOYER TAX EMPLOYEE TAX
SOCIAL SECURITY
(OASDI) $ 110,100 6.20% 4.20% $ 6,826.20 $ 4,624.20
MEDICARE
(HI) No limit 1.45% 1.45% No limit No limit
FEDERAL TAXABLE TAX
UNEMPLOYMENT WAGE BASE RATE
(Please note: family members of sole proprietors and 501(c)(3) organizations are exempt from this tax)
$ 7,000 0.9% Sick pay, all tips and taxable
fringe benefits included.
Employers need to remit FUTA taxes only when the liability has reached $ 500. The .9% rate applies to PA employers. Contact us for other states' rates.
PA INCOME TAX
3.07%
PENNSYLVANIA UNEMPLOYMENT
Beginning with the 4th quarter of 2011, a credit week is a week in which an employee earns $ 100 or more. (Please note: spouses of sole proprietors are exempt from this tax)
TAXABLE TAX
WAGE BASE RATE
Employer $ 8,000 As set by PA
Employee No Limit .08% (.0008)
LOCAL EARNED INCOME TAX
All employers must comply with PA Act 32 for Local Tax Collection as of January 1, 2012. Each locality is identified by its’ PSD code and two PSD codes must be specified for each employee. (A PSD code is assigned for the “Resident Locality” and the “Work Locality.”) A “Certificate of Residency”, which requires the details of each employee’s PSD codes, must be completed and retained in your files. The local earned income tax withholding rate is determined by the higher of either the “Work Local Rate” or the “Resident Local Rate.” A copy of the “Certificate of Residency” is attached for your use. Please visit the Pennsylvania Department of Community & Economic Development website: www.newPA.com for information on rates and PSD codes.
Please note: City of Reading rates: Resident – 3.4%; non-resident – 1.1% (both lowered by .2% in 2012) Philadelphia: Resident – 3.928%; Nonresident – 3.4985%. Philadelphia rates were effective July 1, 2011. (Please note that the City of Philadelphia is not subject to PA Act 32)
LOCAL SERVICES TAX
Most municipalities in Pennsylvania have an annual Local Services tax. Each municipality has the right to collect annual LST tax up to $ 52 per employee. Please check with your municipality for your specific LST rate. Effective January 1, 2008, this tax is withheld on a per-pay basis (if the tax rate is $52 divide your number of payroll periods per year by this amount) and remit quarterly.
FEDERAL MINIMUM WAGE
MINIMUM MINIMUM WAGE MAXIMUM CREDIT MAXIMUM TIP
AS OF WAGE WITH TIPS FOR TIPS CREDIT PERCENTAGE
7/24/09 $ 7.25 $ 2.13 $ 5.12 n/a
PENNSYLVANIA MINIMUM WAGE
7/24/09 $ 7.25 $ 2.83 $ 4.42 n/a
FEDERAL AND OASDI-HI 941 TAX DEPOSIT
To compute your deposit of Federal income tax withheld and OASDI & HI taxes:
OASDI & HI Employer's Federal tax
withheld matching withheld
from + portion of + from = Tax Deposit
employee OASDI & HI employee
New employers are monthly schedule depositors for the first year. Each November, the IRS notifies employers if their coming year deposit requirements will change. Exceptions to the monthly rule: Businesses are able to make quarterly deposits if they are sure they will pay less than $2,500 each quarter of the entire tax year. Businesses with $100,000 one-day liability must deposit by the next business day.
Electronic Deposit Requirement: Federal tax deposit coupons, Form 8109, were discontinued at the end of 2010. As of January 1, 2011, all payroll taxes must be electronically deposited via internet or telephone through the Electronic Federal Tax Payment System. Please contact our office if you need assistance with enrolling in EFTPS.
MISCELLANEOUS
New Hire Reporting regulation for PA employers was effective January 1, 1998. All employers must report certain information on new hires to the state within 20 days. We can assist you with this form.
The Standard Business Mileage Rate for 2012 is 55.5 cents (effective January 1, 2012).
