Vision Payroll

According to the US Department of Labor, in the week ending February 16, the advance figure for seasonally adjusted initial claims was 362,000, an increase of 20,000 from the previous week’s revised figure of 342,000. The 4-week moving average was 360,750, an increase of 8,000 from the previous week’s revised average of 352,750.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 2.4% for the week ending February 9, unchanged from the prior week’s unrevised rate.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance number for seasonally adjusted insured unemployment during the week ending February 9 was 3,148,000, an increase of 11,000 from the preceding week’s revised level of 3,137,000. The 4-week moving average was 3,186,250, a decrease of 6,750 from the preceding week’s revised average of 3,193,000.

This week’s question comes from Courteney, an office manager.

Courteney asks:

I just received my first 2013 paycheck and it is a lot less than my last check from 2012. Why did my paycheck go down in 2013?

Answer: The biggest impact most employees will see is the impact of the social security tax rate reverting to 6.2% after being 4.2% for 2011 and 2012.

Net Pay to Decrease 2% for Many Employees

For employees whose wages are subject to social security tax, many will see net pay decrease by 2% of gross pay. Employees who participate in a §125 cafeteria plan must reduce gross wages by the amount allocated to the cafeteria plan. Other adjustments to gross pay that reduce social security wages may also impact the calculation.

Social Security Wage Base Increases To $113,700 for 2013

The social security wage base increased from $110,100 in 2012 to $113,700 in 2013. Combined with the increase in the rate to 6.2%, the maximum social security tax withholding went from $4,624.20 in 2012 to $7,049.40 in 2013, or an increase of over 52%.

Federal Withholding Essentially Unchanged for Most Employees in 2013

With the release of Notice 1036 in January 2013, Vision Payroll has revised its withholding to comply with the guidance from the Internal Revenue Service (IRS). Most employees will see a small decrease of anyway from a few cents to just under $10 on a weekly paycheck, depending on federal taxable wages. Employees who earn more than $7,991 on a weekly basis will see federal withholding gradually increase over 2012 amounts. Since the highest rate is now 39.6% in 2013 compared to 35% in 2012, the differential will increase as taxable wages increase.

Vision Payroll Now Using Revised 2013 Withholding Tables for Federal Income Tax Withholding

As noted above, Vision Payroll has implemented the revised 2013 withholding tables for federal income tax withholding that were released by the IRS in Publication 1036.

According to the US Department of Labor, in the week ending December 29, the advance figure for seasonally adjusted initial claims was 372,000, an increase of 10,000 from the previous week’s revised figure of 362,000. The 4-week moving average was 360,000, an increase of 250 from the previous week’s revised average of 359,750.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 2.5% for the week ending December 22, unchanged from the prior week’s unrevised rate.

Advance Seasonally Adjusted Insured Unemployment Increases

The advance number for seasonally adjusted insured unemployment during the week ending December 22 was 3,245,000, an increase of 44,000 from the preceding week’s revised level of 3,201,000. The 4-week moving average was 3,224,250, an increase of 6,500 from the preceding week’s revised average of 3,217,750.

The beginning of a new year is a great time to internally audit some of your HR-related practices. Employers should work toward establishing their Human Resources priorities and improving their organization’s Human Resources functions.

Six HR Areas to Review During 2013

The following six areas are ones that all employers should review to ensure compliance with legal requirements and with HR best practices.

• Employee Handbook
• Paid Time-Off Benefits
• Performance Management System
• Health Care reform requirements
• Posters
• OSHA 300A Summary

Learn More About These Six Hot HR Areas for 2013

To learn more about each of these tips, be sure to read the featured article by the HR pros at MyHRSupportCenter, New Year’s Tips from Your Human Resources Professionals. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.

The temporary decrease of the social security tax rate to 4.2% has expired with the end of 2012. Beginning in 2013, the social security tax rate on employees reverts to 6.2%.

Net Pay Will Decrease Approximately 2%

Employees will notice a decrease in net pay by about 2% of gross pay. For example, if gross pay is $1000, net pay would decrease by $20. An adjustment must be made for items that reduce social security taxable wages such as §125 cafeteria plans.

Employers Social Security Tax Rate Had Not Decreased

There will be no change in the tax rate on employers as there had not been a provision to reduce it. The rate on employers remained at 6.2% throughout 2011 and 2012.

2010 Tax Act Had Temporarily Reduced the Rate To 4.2%

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Tax Act) reduced the social security tax withholding rate from 6.2% to 4.2 % effective with payments made after December 31, 2010. Although initially effective only for 2011, it was later extended to include 2012.

Contact Vision Payroll for Further Information

Contact Vision Payroll if you have any further questions on the social security tax rate.

The standard mileage rates for the use of automobiles beginning January 1, 2013 will be 56.5 cents per mile for business miles driven and 24 cents per mile driven for medical or moving purposes the Internal Revenue Service announced in Notice 2012-72 and News Release IR-2012-95.

Both Rates Are Higher than 2012 Rates

The new rates are changed from 55.5 cents per mile for business travel and 23 cents per mile for moving and medical travel for 2012.

Charitable Rate Remains Unchanged

The rate for miles driven in service of charitable organizations remains the same at 14 cents per mile.

Contact Vision Payroll for More Information on 2013 Mileage Rates

Contact Vision Payroll if you have any questions on 2013 mileage rates or visit our Important Facts and Figures page for further information.

Thursday, November 22, 2012 will be Thanksgiving Day, a federal holiday. The offices of Vision Payroll will close Thanksgiving Eve, November 21 at 3 pm EST and re-open Friday November 23. Most banks will also be closed in observance of the holiday. Payroll changes and hours must be submitted before the processing deadlines listed below:

Normal Payroll Date	Process Deadline
11/22/2012	11/19/2012
11/23/2012	11/20/2012
11/26/2012	11/21/2012

Payroll Dates May Be Affected by Thanksgiving Day

Payrolls dated November 22 will be paid November 21 unless a previous change in schedule has been submitted. Payrolls submitted after these processing deadlines will be pushed back until the next available processing day. No changes are required for payrolls dated November 27.

Christmas Day Is Next Federal Holiday

There will be no UPS ground delivery on November 22 or November 23, so we strongly recommend submitting payrolls during this time as early as practicable. The next federal holiday will be Tuesday, December 25, 2012, Christmas Day. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

Monday, November 12, 2012 will be the commemoration of Veterans Day, a federal holiday. Although the offices of Vision Payroll will be open and payrolls will be processed, most banks will be closed in observance of the holiday.

Normal Payroll Date	Process Deadline
11/12/2012	11/7/2012
11/13/2012	11/8/2012
11/14/2012	11/9/2012

Payroll Dates May Be Affected by Veterans Day

Payrolls dated November 12 will be paid November 9 unless a previous change in schedule has been submitted. Payrolls submitted after these processing deadlines will be pushed back until the next available processing day. No changes are required for payrolls dated November 15.

Thanksgiving Day Is Next Federal Holiday

The next federal holiday will be Thursday, November 22, 2012, Thanksgiving Day. Contact Vision Payroll as soon as possible to make changes to or for questions on your processing schedule.

The Social Security Administration announced today that the Maximum Taxable Earnings or Social Security Wage Base would increase from $110,100 in 2012 to $113,700 in 2013.

Social Security Increases Based on CPI Change

Since there was a 1.7% increase in the Consumer Price Index (CPI-W) from the third quarter of 2011 to the third quarter of 2012, the Social Security Wage Base will also increase by 1.7%. This compares to a 3.6% increase in 2012. Wages are scheduled to be taxed at 6.2%, so the maximum tax to be paid by each employee at that rate would be $7,049.40. There is a proposal to keep the current rate of 4.2% for employees, but it has not passed at this time. About 6% of workers who pay Social Security Tax are expected to reach the maximum in 2003.

Retirement Earnings Test Exempt Amounts Increase for 2013

For workers under full retirement age who are receiving Social Security benefits, $1 in benefits is withheld for every $2 above the Retirement Earnings Test Exempt Amount of $14,640 per year or $1,220 per month in 2012. This will increase to $15,120 per year or $1,260 per month for 2013. The year an individual reaches full retirement age, $1 in benefits is withheld for every $3 above the Retirement Earnings Test Exempt Amount of $38,880 per year or $3,240 per month in 2012. This will increase to $40,080 per year or $3,340 per month for 2013. The month an individual reaches full retirement age there is no limit on earnings.

Quarter of Coverage Amounts Increases to $1,160

Also increasing for 2013 is that amount needed to earn a Social Security credit, formerly known as a quarter of coverage. In 2012, a credit is earned for every $1,130 of earnings, up to a maximum of four credits. That amount will increase to $1,160 for 2013.

Social Security Monthly Benefits to Increase in January 2013

The maximum benefit for a worker retiring at full retirement age is also increasing from $2,513 to $2,533. See the table below for other changes in Social Security benefits for 2012.

2013 Social Security Benefits

	2012	2013
Maximum Benefit:
Worker Retiring at Full Retirement Age	$2,513 per month	$2,533 per month
SSI Federal Payment Standard:
Individual	$698 per month	$710 per month
Couple	$1,048 per month	$1,066 per month
SSI Resources Limit:
Individual	$2,000	$2,000
Couple	$3,000	$3,000
SSI Student Exclusion:
Monthly Limit	$1,700	$1,730
Annual Limit	$6,840	$6,960

Contact Vision Payroll Today

Contact Vision Payroll if you have any questions on the Social Security changes for 2013 or get further information at Important Facts and Figures.

According to the US Department of Labor, in the week ending September 29, the advance figure for seasonally adjusted initial claims was 367,000, an increase of 4,000 from the previous week’s revised figure of 363,000. The 4-week moving average was 375,000, unchanged from the previous week’s revised average.

Advance Seasonally Adjusted Insured Unemployment Rate Remains Unchanged

The advance seasonally adjusted insured unemployment rate was 2.6% for the week ending September 22, unchanged from the prior week’s unrevised rate.

Advance Seasonally Adjusted Insured Unemployment Remains Unchanged

The advance number for seasonally adjusted insured unemployment during the week ending September 22 was 3,281,000, unchanged from the preceding week’s revised level. The 4-week moving average was 3,285,250, a decrease of 12,750 from the preceding week’s revised average of 3,298,000.