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As we enter a new year, there are a few changes to payroll taxes that employers and employees should be aware of. Here’s what you need to know for the year 2023:

Social Security Tax: The Social Security tax rate will remain the same at 6.2% for both employers and employees, but the maximum taxable earnings will increase to $158,700 for the year. Any earnings above this amount will not be subject to Social Security tax.

Medicare Tax: The Medicare tax rate will remain the same at 1.45% for both employers and employees, with no maximum taxable earnings limit.

Federal Unemployment Tax (FUTA): The FUTA tax rate will remain at 6% for the first $7,000 of wages paid to each employee. Employers may be eligible for a credit of up to 5.4% if they pay state unemployment taxes on time and in full.

State Unemployment Tax (SUTA): Employers should check with their state’s unemployment agency to determine if there are any changes to the SUTA tax rate or taxable wage base for the year 2023.

Additional Medicare Tax: For high-income earners, the Additional Medicare Tax will remain at 0.9% on wages over $200,000 for individuals and $250,000 for married couples filing jointly.
It’s important for employers and employees to be aware of these payroll tax changes to ensure that they’re withholding and paying the correct amounts.

Consider consulting with a payroll or tax professional like L&Y Tax Advisors LLC to ensure that you’re in compliance with all payroll tax regulations for the year 2023.