FICA Payroll Increases January 1

Over and above the potential lapsing of the "Bush Tax Cuts", unless Congress legislates otherwise, the Social Security Tax (FICA) will go up 2%. It was cut in 2010 by 2% as a stimulus measure for the economy.  Some people will get paid next Friday, and those who get paid then will probably see the increased rate of the Social Security tax.

For the past two tax years, employee contributions to the Social Security program was 4.2 percent, down from the usual rate of 6.2 percent (this comes on the FICA line item of a paystub) on earnings of up to $110,100 in 2012 and up to $113,700 in 2013. That 2 percent rise in payroll taxes would result in 160 million American wage earners seeing their tax bills increase by an average of $1,000.

Source:  Multiple Sources

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