Payroll Updates for 2025
EMPLOYEE & EMPLOYER WITHHOLDINGS & LIMITATIONS FOR 2025
SOCIAL SECURITY
Rate for both the employee and employer stays the same at 6.2%. The wage base increases from $168,600 to $176,100.
MEDICARE
Rate for both the employee and employers stays the same at 1.45%; also, the withholding 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% for wages over $200,000. This does NOT affect the employer rate.
401(k), 403(b) & 457 plans
Limitation for elective deferrals (contribution) for employees who participate increases from $23,000 to $23,500, and the catch-up for participants aged 50 and over is $7,500. The catch-up for participants attaining age 60 to 63 in 2025 is $11,250; note that the maximum catch-up contribution for a person turning 64 in 2025 is $7,500.
SIMPLE PLAN
The general limitation for elective deferrals increases from $16,000 to $16,500, and catch-up for participants aged 50 and over is $3,500. The catch-up for participants attaining age 60 to 63 in 2025 is $5,250; note that the maximum catch-up contribution for a person turning 64 in 2025 is $3,500. Also note that the general limitations of $16,500 elective deferrals and $3,500 catch-up contributions can be increased for participants of certain applicable plans to $17,600 and $3,850, respectively, and you should contract your plan administrator to see if the higher amounts are applicable in your situation.
PA state unemployment wage base
Remains at $10,000 in 2025.
PA state unemployment employee
Remains at 0.0007 in 2025.
Other Updates for 2025
MILEAGE RATES
- $0.70 per mile for business miles driven in 2025.
- $0.21 per mile for medical or moving purposes in 2025.
- $0.14 per mile driven in service of charitable organizations in 2025.
HSA CONTRIBUTION LIMITS
Individual increases to $4,300. Family increases to $8,550. Additional catch-up of $1,000 allowed for those 55 and over.
HDHP minimum required deductibles
Limits will increase to $1,650 for individual and $3,300 for family coverage.
out-of-pocket maximum limits FOR HDHP
Limits will increase to $8,300 for individuals and $16,600 for family coverage.
FILING DATES
Reminder
The e-filing requirement for information returns this filing season remains at 10. This means a business that files 10 or more forms 1099s, W-2s and other information returns this year (in total) must file them electronically to be compliant with the requirements.
W-2 FILING
Recipient copy due to employee, paper copy A due to Social Security Administration, electronic copy A due to Social Security Administration – ALL DUE January 31, 2025.
1099-MISC/1099-NEC FILING
Recipient copy due to subcontractor, paper filing due to IRS, electronic filing due to IRS – ALL DUE January 31, 2025.
