Tools
Federal Websites
- Internal Revenue Service
- Social Security Administration
- U.S. Citizenship and Immigration Services
- U.S. Department of Labor
- Equal Employment Opportunity Commission
- Federal Office of Child Support Enforcement
- U.S. House of Representatives
- U.S. Senate
- U.S. Department of Health and Human Services
- IRS guide for the Small Business and Self-Employed
- NEW: Fact Sheet - Cobra Premium Reduction
Payroll, Tax and HR Related Websites
- American Payroll Association - Service and Support for the Payroll Industry
- Society for Human Resource Management - the leading voice of the HR profession.
- Independent Payroll Providers Association - a national association of privately held companies whose primary function is the preparation of payroll and payroll taxes for employers of all sizes.
- AICPA - Serving the Accounting Profession since 1887.
- Council on State Taxation - To preserve and promote equitable and nondiscriminatory state and local taxation of multijurisdictional business entities.
State Update for 2011
At least 18 states have increased their taxable wage limits for unemployment insurance for tax year 2011, according to a BNA survey. Four states have decreased their wage limit(*).
In the state wage base chart below, all wages known to have increased are highlighted in bold.
Each state limits the amount of wages paid each covered employee that are taxable for unemployment insurance purposes, but not below the federal standard of $7,000. Thus far, Washington has the highest taxable wage base for 2011 ($37,300).
STATE |
2010 ($) |
2011 ($) |
8,000 |
8,000 |
|
34,100 |
34,600 |
|
7,000 |
7,000 |
|
12,000 |
12,000 |
|
7,000 |
7,000 |
|
10,000 |
10,000 |
|
15,000 |
15,000 |
|
10,500 |
10,500 |
|
9,000 |
9,000 |
|
8,500 |
7,000 |
|
8,500 |
8,500 |
|
38,800 |
34,200 * |
|
33,200 |
33,300 |
|
12,520 |
12,740 |
|
9,500 |
9,500 |
|
24,500 |
24,700 |
|
8,000 |
8,000 |
|
8,000 |
8,000 |
|
7,700 |
7,700 |
|
12,000 |
12,000 |
|
8,500 |
8,500 |
|
14,000 |
14,000 |
|
9,000 |
9,000 |
|
27,000 |
27,000 |
|
7,000 |
7,000 |
|
13,000 |
13,000 |
|
26,000 |
26,300 |
|
9,000 |
9,000 |
|
27,000 |
26,600 * |
|
10,000 |
12,000 |
|
29,700 |
29,600 * |
|
20,800 |
20,900 |
|
8,500 |
8,500 |
|
19,700 |
19,700 |
|
24,700 |
25,500 |
|
9,000 |
9,000 |
|
14,900 |
18,600 |
|
32,100 |
32,300 |
|
8,000 |
8,000 |
|
7,000 |
7,000 |
|
19,000 |
19,000 |
|
7,000 |
10,000 |
|
10,000 |
10,000 |
|
7,000 |
9,000 |
|
9,000 |
9,000 |
|
28,300 |
28,600 |
|
10,000 |
13,000 |
|
8,000 |
8,000 |
|
22,200 |
22,600 |
|
36,800 |
37,300 |
|
12,000 |
12,000 |
|
12,000 |
13,000 |
|
22,800 |
22,300 * |
Federal withholding information
- Personal exemption - $3,700 for 2011
Social Security
(Old age, survivors, and disability insurance):- 4.2% on $106,800 for 2011 employee portion. - 6.2% on $106,800 for 2011 employer portion.
-10.4% on $106,800 for 2011 (self employed).
Medicare basic hospital insurance
-1.45% on all wages (employee & employer)
-2.9% on net earnings (self employed)
Possible Retroactive Extension of Expired FUTA Surtax
The 0.2% Federal Unemployment Tax Act (FUTA) surtax expired on June 30, 2011. The permanent gross FUTA tax rate is 6.0%. The 0.2% surtax was added in 1976 and has been in effect since then. After expiration, the net FUTA rate will be reduced to 0.6% on FUTA taxable wages paid beginning July 1, 2011 (0.8% – 0.2% = 0.6%).
However, it is possible that the surtax may be extended retroactively by the U.S. Congress as part of comprehensive unemployment insurance reform efforts, or as part of a tax extender bill later this year. With the surtax expiring, PTP will separately track FUTA taxable wages paid before July 1, and FUTA taxable wages paid after June 30. Because of the possibility of a retroactive extension, however, employers may consider it prudent to set aside monies at a rate of .8%
FUTA tax until the third quarter FUTA deposit is due on October 31, 2011.
FUTA Wage Base and Rates (Effective 7/1/2011)
-6.0% less credit for contributions to state funds up to 5.4% on $7,000 (employer)
Employers who either employ one or more individuals in each of twenty different weeks in a calendar year or pay wages of $1,500 or more during any calendar quarter in the current or preceding calendar year pay 6.0%. Employers are entitled to a credit against their FUTA liability for contributions to state funds. The credit is limited to 90% of a deemed 6% federal tax rate (5.4%). The net effective FUTA rate for most employers is therefore 0.6% on the first $7,000 of wages paid to each employee in a calendar year. However, because of the possibility of a retroactive extension of the recently expired FUTA surtax, employers may consider it prudent to set aside monies at a rate of .8%
401(k) limit
- $16,500 for 2011
Minimum Wage
- $7.25 per hour effective 7/24/09.
Personal exemptions reduce the employee's taxable income on their Form 1040 (US Individual Income Tax Return). Withholding allowances free approximately the same amount of wages from income tax withholding and therefore approximate the employee's tax liability at the end of the year. Exemptions and allowances may be used synonymously.
An employee is entitled to federal withholding allowances for himself, his spouse, and his dependents. The value of the exemption used by upper income persons is reduced and phased out when adjusted gross income reaches specified levels. Check with your tax professional for definitive advice on allowances/exemptions. Back to top.
Bonus or Supplemental wages are compensation paid to an employee in addition to regular wages and include, but are not limited to, bonuses, commissions, overtime pay, accumulated sick leave, severance pay, awards and prizes, back pay, retroactive wage increases, and payments for nondeductible moving expenses. Back to top.
Cafeteria plans, or flexible benefit plans, FSAs (Flexible Spending Agreements), and (Health Savings Accounts) HSAs are employee benefit plans, authorized by Internal Revenue Code Section 125, under which employees may choose from among two or more benefits (consisting of cash and qualified benefits) offered by an employer. Employee deductions to fund the benefits are exempt from federal income tax, FICA, and, in some states, state income tax, withholding.
Benefits that may be offered under a FSA or cafeteria plan include accident and health insurance, dependent care assistance, group legal services, group term life insurance (with some restrictions), and additional vacation days. Back to top.
An amount that is, or may be, subtracted from an employee's paycheck. They can be taken pre-tax or after tax depending on the type of deduction. The employee must agree to have deductions withheld from their paycheck. Back to top.
Deferred Compensation Plan (401k)
Deferred compensation plans are employee benefit plans, under which employees may contribute a percentage of wages to tax deferred savings plans rather than receive the amounts as current compensation. The most commonly used deferred compensation plan is the 401(k) plan.
Employee contributions to 401(k) plans are exempt from federal income tax and, in some states, state income tax withholding but are not exempt from FICA withholding. Employer contributions, made on behalf of the employee, are also exempt from federal income tax withholding. Contributions and earnings accumulate tax free until distributed to the employee at retirement.
The maximum amount that an employee can elect to defer is adjusted annually for inflation. There are "catch-up" provisions available for employees over the age of 50. Check with your plan administrator for details. Back to top.
A person who is claimed as a dependent must:
- be a child of the employee who is either under 19 or a full-time student under 24
- or, be a child of the employee who is a full-time student over 24 who is reasonably expected to receive less than $3,650 of income during the taxable year
- or, be reasonably expected to receive less than $3,650 of income during the taxable year
- or, be permanently and totally disabled and receive income for services performed at a sheltered workshop operated by a charity or government
- receive more than half his support from the employee;
- be a citizen, national, or resident of the United States, or a resident of Canada or Mexico, or an alien child adopted by and living with a United States citizen abroad;
and be either:
- a child, grandchild, stepchild, parent, grandparent, stepparent, brother, sister, stepbrother, stepsister, in law, aunt, uncle, nephew, or niece of the employee
- or, a member of the employee's household for the taxable year and have the employee's home as his principal place of abode;and not file a joint return.
Federal Insurance Contributions Act (FICA)
The taxes imposed under this law fund social security. Every employer is required to match the current social security tax rate imposed the employee's first earnings up to a specified maximum taxable wage, as well as the Medicare tax rate imposed on all of the employee's taxable wages. No credits or withholding exemptions are permitted for the calculation of FICA taxes. When there is more than one employer, each must withhold FICA tax from the employee up to the taxable wage base. Back to top.
Filing or Marital Status (Form W-4)
Single, Married Filing Jointly, Married Filing Separately, Head of Household and Exempt
Employees must indicate their status on, the employer must withhold according to the correct employee table. Back to top.
A garnishment is a court action initiated by a creditor in an effort to obtain a part of an employee's earnings before the earnings are turned over to the employee. Back to top.
Wages, before necessary taxes and voluntary deductions have been withheld. Back to top.
Also known as Take Home Pay, it is income after necessary deductions and taxes have been withheld. Back to top.
An employee who receives cash tips in excess of a specified amount in a month must report them to his employer by the 10th day of the following month. Employers are subject to FICA taxes on the reported tip income.
If a tipped employee also earns regular wages, the amount to withhold on tips should be figured as if the tips were a supplemental wage payment. If income tax was withheld from regular wages you may withhold on the tips at a flat rate or you may add them to the regular wages and withhold as if the total were a single wage payment. If income tax was not withheld from regular wages, the supplemental rate may not be used. Back to top.
* If you are a PC Input customer, please use our PC Remote software to calculate and submit checks to be reported with payroll.
Here you may calculate your net pay or "take home pay." Take home pay is what is left from your wages after withholdings for taxes and deductions for benefits have been subtracted. Salaried employees can enter either their annual salary or earnings per pay period.
The Hourly Paycheck Calculator
Here you may calculate take home pay based on up to six different hourly pay rates that you enter. This is perfect for those who are paid on a changing hourly basis.
The Tip Tax Calculator
For those who receive tips, here is an easy way to verify or anticipate what your paycheck will be. For our calculations, we assume that the tip is already received by the employee.
Form W-4 Assistant
This tool will take you step by step through the process of filling out a Form W-4. The W-4 form determines how much of your pay is withheld to pay Federal, and in some cases, state and local taxes. As the last step, you can even print an official copy to give to the payroll department at your company.
Here you may calculate the gross check based on what you want the net amount to be.
Here you may calculate a Bonus check using the aggregate method.
Here you may calculate a Bonus check using the percentage method.
Note: You will need Adobe® Acrobat® Reader® to view and print the forms.
 |
Fax Transmittal Form |
|
State Supplemental Authorization |
|
Affiliate Cancelations Form |
|
Amended Return Request 2011 |
|
Fed ID # Change Notification Letter |
