Feds see paychecks shrink with payroll tax hike

By Kellie Lunney ; January 4, 2013

Federal employees will see less money in their first 2013 paycheck because of the end of the payroll tax holiday.

The payroll tax holiday officially expired on Jan.1, and Congress did not renew it as part of the final compromise on the fiscal cliff. The government reduced the payroll tax funding Social Security for individuals from a rate of 6.2 percent to 4.2 percent in 2010 and 2011 to help stimulate the economy. For individuals, the rate has now reverted to 6.2 percent of annual wages up to $113,700, which means most Americans will see their paychecks shrink this year. Employers and individuals each pay 6.2 percent, with the combined 12.4 percent going to finance Social Security. Continue reading “Feds see paychecks shrink with payroll tax hike”