Dear Clients and Friends,
Below are the updated payroll and wage rates for 2021.
You can find additional 2021 Payroll and Wage updates by visiting our website: 2021 Payroll and Wage Updates.
2021 FEDERAL PAYROLL AND WAGE
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Social Security (Employee & Employer Paid)
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Maximum Taxable Earnings:
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$142,800
($137,700 in 2020)
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Percent of Taxable Wages:
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6.2%
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Maximum Withholding:
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$8,853.60
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Medicare (Employee & Employer Paid)
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Maximum Taxable Earnings:
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No Limit
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Percent of Taxable Wages:
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1.45%
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Maximum Withholding:
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No Limit
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Maximum Amount:
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No Limit
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Additional Medicare Tax:
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0.9%
(on wages in excess of $200,000 in a calendar year per employee)
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FUTA (Employer Paid)
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Maximum Taxable Earnings:
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$7,000
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Percent of Taxable Wages:
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0.6%
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2021 CALIFORNIA PAYROLL AND WAGE
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Minimum Wage Effective January 1, 2020
(Rate varies by county – check with your county)
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For Employers with 26 or more employees:
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$14.00
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For Employers with 25 or less employees:
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$13.00
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*Overtime pay is required for hours worked in excess of eight in a single day and/or forty hours in a workweek
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SUI (Employer Paid)
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Maximum Taxable Earnings:
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$7,000
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Employer Tax Rate:
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1.5%-6.2%
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Employment Training Tax:
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0.1%
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SDI (Employee Paid)
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Maximum Earnings:
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$128,298
($122,909 in 2020)
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Percent of Taxable Wages:
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1.2%
(1.0% in 2020)
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Maximum Withholding:
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$1,539.58
($1,229.09 in 2020)
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For the most part, employment payroll taxes must be remitted to the IRS and EDD on either the semi-weekly or monthly basis. In addition, some companies may be required to submit the payments electronically to the IRS. These rules change in each individual case every January:
1. For EDD, as of January 1, 2018 all quarterly forms and payments MUST be submitted electronically. Each employer must comply with the depository rules to avoid penalties. Please contact our office if you have any questions or refer to the IRS and EDD Employer’s Tax Guides for further guidance.
HOUSEHOLD EMPLOYERS (Federal and State Requirements)
Federal obligations are reported and paid with annual Federal Form 1040 filing; California requires quarterly filing when household wages reach $750.00 in a calendar quarter.
Sincerely,
Duffy Kruspodin, LLP
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