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This article describes how to set up the rates for calculating US taxes, Social Security, Medicare,etc. |
What's New
Employers may use an optional computation bridge to treat 2019 or earlier Forms W-4 as if they were 2020 or later Forms W-4 for purposes of figuring federal income tax withholding.
Cause
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Step-by-step guide/Workaround/Answer/Article Body
What do you need to do to solve the problem
((SHIFT + ENTER to line break without breaking the list number))Social Security and Medicare Taxes
Tax rates and the social security wage base limit. Social Security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage subject to the tax for the year.Rates
Social Security and Medicare Taxes multiply each payment by the employee tax rate.
(reference 2020 Publication 15 (irs.gov))
2020 Social Security Tax Rate
- Security tax rate is 6.2%(amount withheld) each for the employer and employee (12.4% total)
- Social security wage base limit is $137,700
2020 Medicare Tax Rate
- 1.45% (amount withheld) each for the employee and employer (2.9% total)
- There is no wage base limit for Medicare Tax; all covered wages are subject to Medicare Tax
- Additional Medicare Tax withholding
- 0.9% additional Medicare Tax in excess of $200,000 in a calendar year
- No employer share for Additional Medicare Tax ( go to this site for other information about additional Medicare Tax IRS.gov/ADMT)
2020
Top organization unit > Rates: define Global Rates used for calculation of US taxes and contributions:
Social Security and Medicare Taxes
Tax rates and the social security wage base limit. Social Security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage subject to the tax for the year.
Rates
Social Security and Medicare Taxes multiply each payment by the employee tax rate.
(reference 2020 Publication 15 (irs.gov))
2020 Social Security Tax Rate
- Security tax rate is 6.2%(amount withheld) each for the employer and employee (12.4% total)
- Social security wage base limit is $137,700
2020 Medicare Tax Rate
- 1.45% (amount withheld) each for the employee and employer (2.9% total)
- There is no wage base limit for Medicare Tax; all covered wages are subject to Medicare Tax
- Additional Medicare Tax withholding
- 0.9% additional Medicare Tax in excess of $200,000 in a calendar year
- No employer share for Additional Medicare Tax ( go to this site for other information about additional Medicare Tax IRS.gov/ADMT)