Important Tax Updates for 2016

Beth Dean 12.30.15
54 White Desktop

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.

Also on Nextep

Get the low down on how to handle pay correctly. Should you pay your employees for working during lunch? Yes.  Easy answer! Right? Well, no. Though the simple answer is an emphatic yes, it’s a bit more nuanced.  The topic of lunch and compensable time can be tricky. There are many ways an employee could […]
Read more
Could your employee handbook stand up to a lawsuit or EEOC claim? Here are six tricky areas that could mean trouble for your company. Landmine 1: A handbook that’s older than dirt When was the last time you reviewed your company’s employee handbook? If it’s been longer than a year, then it’s been too long.  […]
Read more
(JANUARY 13, 2022) UPDATE: The Supreme Court halted OSHA’s emergency temporary standard (or ETS) to enforce COVID-19 vaccination statuses for employees. While there’s a chance new OSHA guidance could emerge at some point, you can disregard the previously announced vaccination mandate deadlines. As always, we’ll keep you in the loop if new legislation emerges. If you […]
Read more
Even an employer with the best of intentions can become the subject of a lawsuit. Lawsuits by employees are the biggest source of litigation against US entities (Beazley), making it essential for companies to protect themselves against lawsuits. This is where Employment Practices Liability Insurance (EPLI) can offer major financial protection for your company. What […]
Read more
Did you know partnering with a professional employer organization (PEO) can lower your company’s risk?  There are plenty of ways a PEO can take the burden of compliance off your plate to focus on company goals, attracting top talent, and being an employer of choice among competitors.  Here are some notable benefits of partnering with […]
Read more
After multiple delays, Texas officially released its new, increased SUTA rates, creating additional tax payments for many companies. While SUTA rate notices typically occur at the end of each year, many were delayed due to COVID-19. With unprecedented unemployment claims, state unemployment funds were depleted quickly. This rise in unemployment also affected the state SUTA […]
Read more
Minimum wages across many cities and a handful of states will increase on July 1, 2021. As a reminder, when state law differs from federal law, employers must use the one that benefits the employee the most. For example, if a state’s minimum wage is higher than the $7.25 federal minimum wage, it must be […]
Read more
There are many new or updated state laws or employers that will go into effect on July 1, 2021. If your state has an update, you’ll find it below. As with any other regulation, laws are subject to last-minute changes, visit the Department of Labor online for more info. You can also find minimum wage […]
Read more
Under the OSHA Act, employers are responsible for providing a safe work environment, free from hazards that can cause serious harm. On June 10, 2021, the Department of Labor (DOL) along with the Occupational Safety and Health Administration (OSHA) posted new guidance to protect at-risk and unvaccinated employees from COVID-19 in the workplace.  Requirements Part […]
Read more
We recently reported that President Trump signed an executive order and three memoranda for COVID relief. With no interference thus far from Congress, those orders are scheduled to become active September 1.  One of the memoranda we are most frequently asked about is the “payroll tax holiday.” This provision gives employers the option to let employees […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. Updated ADA guidelines have been issued in light of COVID-19 The COVID-19 pandemic is presenting unique challenges to people from all walks of life. In times such as these, we see people join together to fight for the common good — […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. On March 20, the Department of Homeland Security (DHS) announced flexible guidelines to the requirements related to Form I-9, due to COVID-19.  Employers may obtain, remotely inspect, and retain copies of the documents their employees provide to complete Section 2 of […]
Read more

Download Our App