When it comes to the federal leviathan devouring larger and larger chunks of our economy, ignorance ain’t bliss:
Memo from his HR department:
Subject: 2013 Payroll Taxes
To: All Employees
We have received a number of inquiries regarding changes to 2013 payroll taxes. As a company we must deduct payroll taxes as directed by the government. Our payroll provider has provided detailed information that you may use as you review your first paycheck of 2013. You can find this at the following link: http://www.adp.com/tools-and-resources/legislative-updates.aspx
Apparently a lot of people were complaining about their paychecks being unexpectedly smaller. Here’s the explanation from ADP:
The reduced 4.2% rate for employee Social Security taxes that was in effect for 2011 and 2012 has expired. The employee Social Security tax rate will return to 6.2% for 2013 wages up to the taxable wage limit of $113,700. Consequently, employees’ net pay under the taxable wage limit will decrease accordingly. The maximum Social Security tax that an employee would pay will be $7,049.40 for 2013.
And as it turns out, workers making $30,000 will take a bigger hit on their pay than those earning $500,000!