1430 Gadsden Highway - Suite 116
Birmingham, Alabama 35235
Tel:(205) 661-1185

Federal Withholding


Federal Withholding

2012 Federal Wage & Tax Rates

Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. This limit is adjusted each year with changes in the national average wage index. For earnings in 2012, the Social Security taxable wage base is $110,100.

FICA - Social Security


Social Security Taxable Wage Base per Employee

$110,100

Employer Tax Rate for Social Security

6.2%

Employee Tax Rate for Social Security

4.2%*

Self-Employed Tax Rate for Social Security

10.4%

* The rate of 4.2% is a temporary extension of the payroll tax cut through December 31, 2012.

FICA - Medicare


Medicare Taxable Wage Base per Employee

No Limit

Employer and Employee Tax Rate for Medicare

1.45%

Self-Employed Tax Rate for Medicare

2.9%

FUTA - Federal Unemployment Tax Act


FUTA Taxable Wage Base per Employee

$7,000

Employer Net Tax Rate

0.6%

2012 Federal Minimum Wage Rates - Effective 7/24/2009

Minimum Wage

Minimum with Tips

Maximum Credit for Tips

Federal

$7.25

$2.13

$5.12

For information on state minimum wage rates, you can visit the Department of Labor's website by holding the Ctrl key and clicking on the link, State Minimum Wage Rates below.

State Minimum Wage Rates

2012 Retirement Plan Limits

The US Government sets dollar limits as to how much an employee can contribute to their company's retirement plan each tax year. If an employee reaches the age of 50 during the current tax year, they qualify for the "Catch Up" provision... but only if it is an established provision of their company's 401(k) plan.

Standard

'Catch Up' Provision

401(k) Limit for 2012

$17,000

$22,500

Simple Plan IRA for 2012

$11,500

$14,000