Vision Payroll

The California Employment Development Department (EDD) recently released the 2011 UI, ETT, and SDI rates. An historical compilation of prior year rates is available in Form DE 3395.

2011 UI, ETT, and SDI Rates

The UI rate schedule in effect for 2011 is Schedule “F+.” This is Schedule F plus a 15% emergency surcharge, rounded to the nearest tenth. Schedule “F+” provides for UI contribution rates from 1.5% to 6.2%.

Exception for Employers Subject to §977(c)

Exception: Employers subject to §977(c) of the CUIC must pay at the highest rate provided by law plus an additional 2%.

Taxable Wage Limit Remains at $7,000

The taxable wage limit is $7,000 per employee.

The Voluntary UI program Is Not in Effect for 2011

The Employment Training Tax (ETT) rate for 2011 is 0.1%. The UI and ETT taxable wage limit remains at $7,000 per employee per calendar year.

SDI Rate Is Set at 1.2%

The State Disability Insurance (SDI) withholding rate for 2011 is 1.2%. The taxable wage limit is $93,316 for each employee per calendar year. The maximum to withhold for each employee is $1,119.79.

Notices Will Be Mailed December 31

UI, ETT, and SDI tax rates are combined on a single rate notice, Notice of Contribution Rates and Statement of UI Reserve Account (DE 2088). The DE 2088 will be mailed in December, with a mailing date of December 31. Employers will have 60 days from the December 31 mailing date to protest any item on the DE 2088 except SDI and ETT, which are specifically set by law.

New Employer Rate Set at 3.4%

For new employers, the UI tax rate is 3.4% for up to three years. Owners that purchased an established business have the option of acquiring the previous owner’s UI tax rate.

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the California unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

Adjustment Is Tied to Changes in CPI-W

The adjustment is tied to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the 12 months ending in August. The 1.4% increase in the CPI-W will result in an increase of $0.12 for 2011.

Attorney General Rob McKenna Concluded Minimum Wage Should Not Increase

In legal opinion AGO 2010 No. 7, the Washington State Office of the Attorney General concluded that since there was a net decrease in CPI-W since August 2008, the minimum wage should remain unchanged for 2011. Since several groups have filed suit challenging the increase in the minimum wage, it is likely that courts will be required to provide the final answer as to how the minimum wage should change, if at all, for 2011.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Washington minimum wage increase or visit our Minimum Wage Chart.

The Vermont Department of Labor announced recently that pursuant to Title 21 of the Vermont Statutes, Annotated §384, the minimum wage for the state of Vermont will increase from $8.06 to $8.15 per hour effective January 1, 2011. The law requires an adjustment to the minimum wage be calculated each year.

Adjustment Is Tied to Changes in CPI

The adjustment is tied to the change in the federal Consumer Price Index, US city average, not seasonally adjusted (CPI-U) for the 12 months ending in August and cannot increase more than five percent per year. The 1.1% increase in the CPI-U will result in an increase of $0.09 for 2011.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Vermont minimum wage increase or visit our Minimum Wage Chart.

The Wisconsin Department of Workforce Development has announced an increase in the taxable wage base for 2011. The wage base will increase from $12,000 for 2010 to $13,000 for 2011. Under Wisconsin Statute 108.18, rates for 2011 will be determined under Schedule A.

Schedule A Results in Highest Level of Employer Rates for 2011

Rates range from a low of 0.27% to a high of 9.80%, including solvency rates that range from a low of 0.20% to a high of 1.90%.

New Employer Rates Remain Unchanged

The new employer rates remain unchanged for 2011 and are as follows:

Employer Type	Rate
Construction	6.60%
Non-Construction Under $500,000	3.60%
Non-Construction $500,000 or More	4.10%

Find Out the Wage Base for All States by Visiting the Vision Payroll Unemployment Taxable Wage Base Page

Contact Vision Payroll if you have any questions on the Wisconsin unemployment taxable wage base or visit our Unemployment Taxable Wage Base page.

In IR-2010-108, the Internal Revenue Service (IRS) announced the 2011 compensation limitation for Simplified Employee Pension (SEP) plans. Under §408(k)(2) of the Internal Revenue Code of 1986, SEP contributions are generally required for any employee of an employer with a SEP plan who has attained age 21, has performed service for the employer during at least three of the immediately preceding five years, and received at least a certain level of “compensation” from the employer for the year.

2011 Compensation Limits Remains Unchanged

For 2011, the compensation limit will remain at $550.

Contact Vision Payroll for More Information on 2011 SEP Plan Changes

Contact Vision Payroll if you have questions on changes to the 2011 SEP Compensation Limitation or visit our Important Facts and Figures page for further information.

In IR-2010-108, the Internal Revenue Service (IRS) announced cost-of-living adjustments to the limits on SIMPLE plan contributions for 2011. The limitation for SIMPLE plans is codified in §408(p)(2)(E) of the Internal Revenue Code of 1986 (IRC). This section also requires annual adjustments as necessary to keep pace with inflation in a manner similar to that required by IRC §415 for retirement plans.

2011 Contribution Limits Remains Unchanged

Because the cost-of-living index in 2010 is lower than it was in 2008, there will be no increases to the amounts. For 2011, the SIMPLE plan regular limitation remains at $11,500. The age 50 and over catch-up contribution remains at $2,500 for individuals who plan to reach age 50 before the end of 2011.

Contact Vision Payroll for More Information on 2011 SIMPLE Plan Changes

Contact Vision Payroll if you have questions on the SIMPLE plan contribution limits or get further information at Important Facts and Figures.

In IR-2010-108, the Internal Revenue Service (IRS) announced the limits on deferral contributions for 2011 under §401(k), §403(b), and §457(e)(15). These limitations are codified in those sections of the Internal Revenue Code of 1986 (IRC). Under IRC §415, the Commissioner of the IRS is required to adjust the plan limitations to keep pace with inflation.

2011 Contribution Limits Remains Unchanged

For 2011, the deferral contribution limitation will remain at $16,500. The age 50 and over catch-up contribution will remain at $5,500 for 2011 for individuals who plan to reach age 50 before the end of 2011.

Contact Vision Payroll for More Information on 2011 Retirement Plan Changes

Contact Vision Payroll if you have questions on changes to the 2011 Retirement Plan Contribution and Compensation Limitations or get further information at Important Facts and Figures.

In IR-2010-108, the Internal Revenue Service (IRS) announced that for 2011 the compensation limitation will remain at $245,000 under §401(a)(17), §404(l), §408(k)(3)(C), and §408(k)(6)(D)(ii) of the Internal Revenue Code of 1986 (IRC).

2011 Contribution Limit Also Remains Unchanged

The contribution limit under IRC §415(c)(1)(A) for defined contribution plans will remain at $49,000. This limit does not include the age 50 and over catch-up contribution of $5,500 when applicable; therefore the total limitation for eligible taxpayers age 50 or over in qualifying plans will be $54,500.

Contact Vision Payroll for More Information on 2011 Retirement Plan Changes

Contact Vision Payroll if you have questions on changes to the 2011 Retirement Plan Contribution and Compensation Limitations or get further information at Important Facts and Figures.

This week’s question comes from Cristina, a company president. We’re doing some planning for next year. What are the 2011 Highly Compensated Employee Limits?

IRS Releases 2011 Highly Compensated Employee Limits in IR-2010-108

In IR-2010-108, the Internal Revenue Service (IRS) announced that for 2011 the Highly Compensated Employee Limitation under §414(q)(1)(B) of the Internal Revenue Code of 1986 will remain unchanged. Non-discrimination testing in some types of retirement plans limits the deferral rate of “highly compensated employees” (HCEs) based upon the deferral rate (ADP) of the “non-highly compensated employees”.

Highly Compensated Employee Compensation Limit Remains at $110,000

For 2011, an HCE is anyone who was a “5-percent owner” at any time during 2010 or 2011 or anyone who received in excess of $110,000 in compensation during 2010 and, if elected by the employer, is in the top twenty percent of employees based upon compensation. The HCE limit was $110,000 for 2008 and 2009.

Look-back Provision Impacts HCE Testing Period

Since the law includes a look-back provision, employees who earned more than $110,000 in 2009 are generally considered HCEs for 2010 plan year testing, employees who will earn more than $110,000 in 2010 are generally considered HCEs for 2011 plan year testing, and employees who will earn more than $110,000 in 2011 are generally considered HCEs for 2012 plan year testing.

Contact Vision Payroll for More Information on HCEs

Contact Vision Payroll if you have questions on changes to the HCE definition for 2010 and 2011 or get further information at Important Facts and Figures.

The Labor Department of the Arizona Industrial Commission announced recently that pursuant to Arizona Revised Statutes §23-363, the minimum wage for the state of Arizona will increase to $7.35 per hour effective January 1, 2011. The law requires an adjustment to the minimum wage be calculated each year.

Adjustment Is Tied to Changes in CPI

The adjustment is tied to the US All-Urban Consumer Price Index (CPI) for the 12 months ending in August. The 1.1% increase in the CPI will result in an increase of $0.10 for 2011.

Find Out the Minimum Wage for All States by Visiting the Vision Payroll Minimum Wage Chart Page

Contact Vision Payroll if you have any questions on the Arizona minimum wage increase or visit our Minimum Wage Chart.