Payroll News

The Social Security Old Age Survivor's and Disability Insurance (OASDI) taxable wage base for 2012 increases to $110,100 from $106,800, the Social Security Administration said Oct. 19. The maximum 2012 OASDI tax payable by each employee is $6,826.20, or 6.2 percent of the wage base. The employer matches the employee amount with an equal contribution.

The 4.2 percent rate now in effect for employees is scheduled to expire Dec. 31 and will revert to the 6.2 percent rate for 2012, unless the federal government acts to extend or change the rate.

For the 1.45 percent tax for the Medicare (HI) portion of the Federal Insurance Contributions Act taxes, there is no wage base and all wages earned are subject to the HI tax.

The agency also announced a 3.6 percent cost of living increase amount that affects several thresholds for benefits and coverage. The Social Security tax annual coverage threshold amount for domestic employees for 2012 increases to $1,800 and remains at $1,500 for election workers.