2013 Payroll Update
Following is a checklist to help employers with year-end payroll and prepare for 2013.
Social Security card and payroll name match:
- The name on your employee’s Social Security card and the Form W-2 must match in the following manner: first name, middle initial and last name. For example: If Mary Ann Jones is on the Social Security card, then the Form W-2 should read Mary A. Jones.
- If any of your employees are currently using a name that does not match their Social Security card due to marriage, divorce, citizenship change, or any other reason, they need to obtain a new card from the Social Security Administration (SSA).
Auto Usage. If your employee uses a company vehicle, please provide the value of the car, the number of personal miles used, the total number of miles driven and the name of the employee so a value can be calculated and added to the last payroll of the year.
Employer HSA contributions. Please provide any employer contributions for 2012 to be added to the 2012 W-2.
S-Corp Health Insurance Premiums. If you are organized as an S-Corporation, we need to include company paid health insurance premiums for each shareholder on their W-2. Please provide the amount paid for each shareholder separately.
Group Term Life Insurance. If you provide group term life insurance in excess of $50,000 of coverage, we need the taxable amount so it can be added to the last paycheck of the year and the information will appear on your employee’s W-2.
Form W-4. If you have any employees claiming exempt from federal withholding on their Form W-4 for 2012, this form expires January 1, 2013. They have a grace period until February 16, 2013 to submit a new 2013 form to you. If the new form is not received by that date, IRS regulations require you to change the allowances to “zero” and the filing status to “single” until a new form is received. You may download a 2013 W-4 at www.irs.gov or you may contact our office.
Software Updates. If you process your own payroll, please insure you are using the correct employee payroll tax withholding rates before processing the first payroll in 2013. Be sure all necessary updates have been completed and you are on the most recent version. For help, contact your software provider. The 2013 IRS tax tables are available on the IRS website at www.irs.gov.
Social Security numbers. The Social Security Number Privacy Act prohibits the display of all or more than 4 sequential digits of the social security number on the paycheck stub. An example of an acceptable format would be XXX-XX-6123.
- 2013 Social Security tax: The employee and employer match will be 6.2%.
- Wage Base: $113,700
- Rate: 6.2%
- Maximum deduction: $7,049.40 ($113,700 x 6.2% = $7,049.40)
2013 Medicare tax:
- Wage base: No wage limit.
- Employee wages in excess of $200,000 will be subject to an extra 0.90%
- Rate: 1.45%
Federal Standard Mileage Rates. The 2013 mileage rates are as follows: standard business mileage rate of $0.565; charitable rate of $0.14; and the medical rate of $0.24.
Retirement Plan Limits. The 2013 limits are as follows:
- 403(b); non-profit employers; public schools - $17,500
- 457; state & local government; tax exempt - $17,500
- 401(k) plans - $17,500
- SIMPLE plans - $12,000
- “Catch-up” contributions for employees over age 50 -- 401(k), 403(b), 457 -- $5,500
- “Catch-up” contributions for employees over age 50 -- SIMPLE plan -- $2,500