Medicare And Social Security Withholdings

Medicare And Social Security Withholdings

Medicare And Social Security Withholdings, We are normally required to include Medicare and Social Security deductions on each pay slip. This applies even if you have nothing withheld for federal, state, and local income taxes.

If you earn at least a certain amount for at least 40 quarters, you can receive Social Security benefits when you retire. Each employer withholds 6.2% of your gross income for Social Security up to an income of $132,900 for 2019. And $137,700 for 2020. Your employer must pay the 6.2% for you that does not come from your wages.

Medicare Fees

Medicare taxes, unlike Social Security taxes, go to pay expenses for current Medicare beneficiaries.

Your employer withholds 1.45% of your gross income from your paycheck. Your employer pays an additional 1.45%, the employer portion of the Medicare tax. There are no income limits for Medicare tax, so all covered wages are subject to Medicare tax.

Employers must also withhold an additional 0.9% (2.35% total) of Medicare tax on earned income of more than $200,000 in a tax year.

Salaries From Year To Year

Your payslip can also show totals from year to year. This is good to know if you want to estimate whether you will have a refund or a balance at the end of the year.

Save the last paycheck stub to compare with your W-2. The amounts on the last pay envelope and the W-2 amounts should usually match. However, your employer may have added other amounts for additional benefits offered. These may be taxable income for you. Contact your payroll department if there are any discrepancies.

Other Records

Your payslip may show deductions for health or life insurance. If so, your stub may show whether the premiums were deducted before tax or after tax. Pre-tax deductions reduce the withholding tax owed to federal, state and local governments.

Some employers offer their employees the opportunity to contribute to retirement plans, such as 401(k)s. Others offer childcare or adoption support. If you took advantage of any of these plans, your stub will usually show deductions for them.

If you have questions about other amounts or tax items on your paycheck stub, check with your manager or your human resources department.

More Information About Paycheck Taxes

Check your paycheck stub and use a W-4 calculator to find out if you need to make any changes to your federal income tax deduction this year. If you’re expecting a big refund this year, you may want to adjust your withholding to get more take-home tax each pay period.

Learn more about W-4 source sorting on payslips