Payroll Updates for 2016

Employee and Employer Withholdings & Limitations

• • Social Security – Rate for both the Employee and Employer stays the same @ 6.2% (.062) – The wage base remains at $118,500.
  • MEDICARE – Rate for both the Employee & Employers stays the same @ 1.45% (.0145) also the tax rate for high-earning employees is still an additional 0.9%, for wages paid to an employee over $200,000. This makes the effective Medicare Tax rate for high-earning employees @ 2.35% (.0235) for wages over $200,000. This does NOT affect the employer rate.

 

• • 401(k), 403(B) & 457 Plans – Limitations for elective deferrals (contribution) for employees who participate, remains at $18,000, and the catch-up for employees aged 50 and over who participate remaining at $6,000.

 

• • SIMPLE Plan – Limitations for elective deferrals will remain at $12,500, and catch-up @ $3,000.

 

• PA State Unemployment Wage Base – Changed from $9,000 to $9,500.00

Other Payroll Updates

Mileage Rates:

• 54¢ per mile for business miles driven in 2016
• 19¢ per mile driven for medical or moving purposes in 2016
• 14¢ per mile driven in service of charitable organizations in 2016

Qualified Transportation Fringe Benefit Limits

• Employer – provided parking went up from $250/month to $255/month
• Combined commuter highway vehicle transportation, transit passes and van pool privileges remains the same at $130/month
• Bicycle commuting reimbursements remains the same @ $20/month

HSA CONTRIBUTION LIMITS

• Individuals $3,350
• Family $6,750
• Additional catch-up of $1,000 allowed for those 55 and over

HDHP Minimum Required Deductibles

• Limits will remain for Individual at $1,300 and Family $2,600

Out of Pocket Maximum Limits

• Individuals $6,550 and Family $13,100

If you have other questions about employee and employer withholdings and limitations, contact Simon Lever today, and let’s start a conversation.