2% Tax Reduction For Employees
A new Social Security tax cut for 2011 will mean a net pay increase for employees. This is part of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. The new tax cut allows for a 2% cut in payroll taxes for employees which will reduce the Social Security Tax (indicated on your paycheck as Fed OASDI/EE) from 6.2% to 4.2%. This reduced tax will not affect Social Security benefits. Additionally, employees do not need to do anything as the employer is responsible for withholding changes.
Learn more about this tax cut at Payroll Tax Cut to Boost Take-Home Pay for Most Workers; New Withholding Details Now Available on IRS.gov
NOTE: The Medicare rate for 2011 remains the same at 1.45%.
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