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This article describes how to set up the rates for calculating US taxes, Social Security, Medicare,etc. |
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For the latest information about developments related to Pub. 15-T, such as legislation enacted after it was published, go to https://www.irs.gov/forms-pubs/about-publication-15-t
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(reference: 2020 Publication 15 (irs.gov), Publications 15T, Recent 15T)
2023
Social Security Tax Rate
Social Security tax rate is the same as in 2021/22 - 6.2% (amount withheld) each for the employer and employee (12.4% total)
2. Social security wage base limit has increased to $160,200
Medicare Tax Rate
Medicare and Additional Medicare tax rates and limits (Additional Medicare) stay the same as in year 2020/ 2021/2022
401k Pension plan Contribution Rate
401k Contribution limits has increased to $ 22 500 (from $ 20 500 in 2022)
401k Catch-up limit remains the same - $ 7 500 (from $ 6 500 in 2022)
2022
Social Security Tax Rate
Social Security tax rate is the same as in 2021 - 6.2% (amount withheld) each for the employer and employee (12.4% total)
Social security wage base limit is $ 147 000
Medicare Tax Rate
Medicare and Additional Medicare tax rates and limits (Additional Medicare) stay the same as in year 2020/ 2021
401k Pension plan Contribution Rate
401k Contribution limit has increased to $ 20 500 (from $ 19 500 in 2020)
401k Catch-up limit remains the same - $ 6 500
2021
Social Security Tax Rate
Social Security tax rate is the same as in 2020 - 6.2% (amount withheld) each for the employer and employee (12.4% total)
Social security wage base limit is $ 142 800
2020
Social Security Tax Rate
Social 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
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
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Top organization unit > Rates: define Global Rates used for calculation of US taxes and contributions:
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Federal Income Tax
Tax
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Tables on Regular Wage
There are two rate options to follow for automated payroll.
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Form W-4, Step 2, Checkbox , Withholding Rate Schedules (Use these if the Form W-4 is from 2020 or later and the box in Step 2 of Form W-4 IS checked)
Tax Rate on Supplemental Wage
Supplemental wages combined with regular wages
If you pay supplemental wages with regular wages but don't specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period.
Supplemental wages are identified separately from regular wages
If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages.
If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages:
Withhold a flat 22% (no other percentage allowed).
If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages and withhold federal income tax as if the total were a single payment for a regular payroll period.
Every year the US tax rates are updated, to maintain the correct calculations in Adonis, when a new payroll year is opened, a new Tax Definition file must be imported to the system. Though, the new rates are never published before the year starts, and normally are either published in January or even later, to keep the calculations running in Adonis the Tax Definition file still has to be updated and imported to the system.
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