If you operate a child care business, you’ll want to know how recent changes to payroll related taxes may affect your daycare payroll for 2013.
Federal Income Tax
Rates will remain the same for persons making up to $400,000 per year ($450,000 for married couples filing jointly). Although the tables are slightly different for 2013, there will be very little difference in the amount withheld for persons under these thresholds.
The employee share of Social Security reverts back to its previous rate of 6.2%. In recent years the rate had been temporarily reduced to 4.2% to help spur consumer spending and aid the economy. That provision has expired, so employees will see 2% more coming out of their checks in 2013 for Social Security. If you happen to post your first payroll or two of the New Year using the old rates, and are using Daycare Payroll Software from Procare, don’t worry. The difference will be made up on the next paycheck issued to each person, once you install Tax Tables for the New Year. The Social Security withholding will be automatically adjusted to account for the increase. Continue reading