As of Jan 1, 2011 the rates for the amount that is to be withheld from employee's wages will change. The rate to be withheld is at 4.2% (or .042). Your match as an employer is still 6.2%. Figuring Social Security and Medicare together, the new rate will be 5.65% (or .0565).

Here is an example: Gross Wages are $300.00. The amount that is withheld from this is $12.60 (Social Security) and $4.35 (Medicare) for a total of $16.95. The net check would be $283.05 (which is what you would write the check for). In this example, you would send in $12.60 + $22.95 (Employers Portion) = $35.55.

Hometown Tax & Recordkeeping will handle these changes for any current payroll clients. Should you have further questions after reviewing this information, please feel free to give us a call!