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Now's the perfect time to review and adjust your paycheck: Payroll Tax Rates and Employee Benefit Limits for 2022
Social Security taxIn 2022, the Social Security tax rate is 6.2% for employers and employees, unchanged from 2021. The Social Security wage base is $147,000 for employers and employees, increasing from $142,800 in 2021. Self-employed people must pay 12.4% on the first $147,000. Medicare taxIn 2022, the Medicare tax rate for employers and employees is 1.45% of all wages, unchanged from 2021. Self-employed people must pay 2.9% on all net earnings. Additional Medicare taxIn 2022, the additional Medicare tax remains unchanged at 0.9%. This tax applies to wages and self-employment income over certain thresholds ($200,000 for single filers and $250,000 for joint filers). 401(k) limitsIn 2022, the maximum contributions to traditional and safe harbor plans are as follows:
Employees can contribute up to $14,000 to a SIMPLE 401(k) plan, up from $13,500 in 2021. HSA and HDHP limitsIn 2022, the maximum contributions to a health savings account are as follows:
In 2022, the limits for a high-deductible health plan are as follows:
FSA limitsIn 2022, employees can contribute:
QSEHRA limitsIn 2022, employers with a qualified small employer health reimbursement arrangement can reimburse employees for health care expenses as follows:
Commuter benefits limitIn 2022, employees can contribute up to $280 per month for qualified commuter benefits (e.g., mass transit and parking), up from $270 per month in 2021. This limit includes any employer contributions Adoption assistance exclusion limitIn 2022, up to $14,890 in employer-sponsored adoption assistance may be excluded from an employee's gross wages, increasing from $14,440 in 2021. Remember, these are all federal rates and limits. Be sure to check with the necessary agencies for state and local payroll rates.
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Travis Raml, CPA
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August 2022
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