2015 Payroll Rates and Limitations

It is that time of year for employers and their employees to prepare for the upcoming tax year. There are some changes in rates and limitations that will go into effect beginning in January 2015. The maximum amount of earnings for Social Security tax has increased, as did the Pennsylvania Unemployment wage limit. Contribution limits for HSAs, 401(k)s, and Simple IRAs have also increased. Following are the 2015 payroll rates and limitations:

SOCIAL SECURITY
Employee rate – 6.2%
Employer rate – 6.2%
The maximum earnings subject to the Social Security tax is $118,500.

MEDICARE
Employee rate – 1.45%
There is an additional Medicare tax of .9% on employees who are single or head-of-household when their wages reach $200,000 and for those who are Married Filing Jointly when their wages reach $250,000. There is no employee wage limit for the Medicare tax.
Employer rate – 1.45% – There is no maximum wage limit for the Medicare tax.

FUTA – .6%
The wage limit for Federal Unemployment is $7,000.

PA WITHHOLDING – 3.07% – There is no employee wage limit for PA withholding tax.

PA UNEMPLOYMENT
The employee rate for PA unemployment is .07%

  • Credit weeks are based on a minimum of $116 per paid week
  • There is no employee wage limit
  • The wage limit for the employer’s share of the PA Unemployment tax is $9,000.

LOCAL SERVICE TAX
If this tax is over $10, it must be collected on a pro-rata basis determined by the number of payroll periods. Divide the tax by the number of pay periods in a year. For instance, a $52 tax would be collected at $1 per week for taxpayers paid weekly.

HSA CONTRIBUTION LIMITS
Single – $3,350
Family – $6,650
Catch-up – $1,000 for those 55 or older

PENSION PLAN LIMITS
401(k) Contributions – Limit – $18,000
Catch-up – $6,000 for those over 50

SIMPLE IRA
Contribution Limit – $12,500
Catch-up – $3,000 for those over 50

TRADITIONAL AND ROTH IRAs
Limit – $5,500
Catch-up – $1,000 for those over 50

As you prepare for year-end and look ahead to 2015, make sure you are aware of the rate and limitation changes effective January 1, 2015. Our Small Business Accounting Services Team is available if you have any questions or concerns regarding these changes.