Below are the current tax rates for payroll withholding for 2016 and 2017. Keep in mind that these rates do change but most payroll software out there will automatically reflect any changes to these rates.
Social Security & Medicare Taxes
Payroll tax rates for 2016 & 2017 include Social Security tax is currently 6.2% for the employee and the same 6.2% for the employer which totals 12.4% paid in to the Gov. Currently, Medicare tax is 1.45% for the employee and the same amount for the employer of 1.45%, totaling 2.9% paid in. The IRS has mulitple pulbications that go further into depth if needed.
Just as some added info for you, FICA is made up of survivors, disability, insurance and old-age taxes, also well known as SS taxes medicare and hospital tax.
Keep in mind that SS tax has a wage base limit that is subject to tax for that particular yr. In 2016, the base limit max is $118,500. Now there isn’t a wage base limit for Medicare taxes unfortunately. Often, employees will receive a nice refund if they are a high earner well over $118,500 in their SS taxes if the employer doesn’t adjust to remove SS withholding’s in excess of $118,500.
Payroll Tax Rates Video:
All wages therefore are subject to medicare taxes for all individuals per current payroll tax rates for 2016 & 2017. Now if an employees wages are greater than $200,000 for a year the employer is required to withhold additional medicare tax equal to 9 percent additional tax. Further, the employer is not required to match the added medicare tax.
The payroll tax rates for 2016 & 2017 have already been inputed into Quickbooks free trial period online so there’s no need to memorize these amounts.
Quickbooks Payroll has done a great job included all of these rates in their program. Taxes can add up in a hurry but the penalties for not calculating these amounts correctly can be much more costly.