Tax and Minimum Wage Changes for 2013
Tax and Minimum Wage Changes for 2013
FICA
Most employees noticed tax increases on their first payroll check for 2013. This is due to the rescinding of the “Payroll Holiday Tax” for FICA taxes. What is FICA? FICA stands for the “Federal Insurance Contributions Act.” The taxes collected under FICA are used to pay Social Security benefits.
The normal rate for this tax is 6.20% for employers and 6.20% paid by employees. For years 2011 and 2012, the federal administration lowered the rate to 4.20% for employees only. The holiday apparently is over and the rate was increased from 4.20% back to 6.20% for 2013. FICA is paid on all wages up to a certain “limit.” Unfortunately, the limit changes every January 1st. The new FICA limit for the year 2013 is $113,700. Here is a table of limits for a three year period:
Year Contribution Percentage Limits
2011 4.20% 106,800
2012 4.20% 110,100
2013 6.20% 113,700
Arizona Minimum Wage Change
For year 2013, the Arizona minimum wage has changed to $7.80. The previous rate was $7.65.
If you have questions regarding these changes effective January 1, 2013, please contact OneSource Employer Services at 602-553-8300.
