2016 brings a number of important tax updates that will impact your company’s financial planning and employees paychecks. These changes are largely mandated by the Internal Revenue Service (IRS) and will become effective January 1, 2016.
To aid in preparing your company’s budget for 2016, below is a breakdown of upcoming changes.
- Social Security wage base First $118,500 of wages in 2016
- FICA Social Security (OASDI) 6.2%, up to the wage base
- FICA Medicare 1.45% up to $200,000, then 2.35% (The additional 0.9% is assessed to the employee only)
- 401(k) maximum deferral $18,000
- 401(k) additional deferral for ages 50+ $6,000
- HSA contribution limit $3,350 individual, $6,750 family
- HSA additional contribution for ages 55+ $1,000
- FSA contribution limit $2550 for FSA and LPFSA, $5,000 for DCA
- Federal minimum wage
- (state min wage takes precedence if higher) $7.25; no change from 2015
- SUTA wage base – Oklahoma $17,500
- SUTA wage base – Texas $9,000
- SUTA wage base – Colorado $12,200
- SUTA wage base all other states See americanpayroll.org/members/stateui
- FUTA wage base First $7,000 of wages in 2016
- FUTA rate 0.60% net (6% rate, minus credit of up to 5.4%)
- Mileage rate – business use $0.575 per mile in 2015; waiting for 2016 announcement
For more information, please contact Nextep’s Human Resources or Payroll Departments.