Payroll Planning

Payroll Planning

Prepare now for the following payroll changes that will took effect on January 1, 2019. 

Download PDF of 2019 Payroll Changes

Social Security Wage Base. The 2019 wage base will be $132,900. The employee and employer match will be 6.2%. The maximum deduction will be $8,239.80 ($132,900 x 6.2%).    

Medicare Tax. As in prior years, there is no limit to the wages subject to the Medicare Tax; therefore, all covered wages are still subject to the 1.45% tax. Wages paid in excess of $200,000 will be subject to an extra 0.9% Medicare tax that will be withheld only from employees’ wages. 
Dependent Care Limits. The maximum exclusion from gross income under a dependent care program is $5,000 for an individual or a married couple filing jointly.
Health Flexible Spending Arrangements. The dollar limitation on voluntary employee salary reductions for contributions to a health flexible spending arrangement (FSA) is $2,700.

Health Savings Accounts.
HSAs are for eligible individuals in a high deductible health plan. The maximum annual contribution that can be made to an HSA in 2019:    

Individual: $3,500
Family: $7,000

Catch-up contributions: Individuals 55 and older can make additional catch-up contributions to an HSA until they are enrolled in Medicare. The additional allowable contribution is $1,000.

Federal Standard Mileage Rates. The 2019 mileage rates are $0.58 per mile for business miles driven, $0.20 per mile for medical or moving purposes, and $0.14 per mile driven in service of charitable organizations. 

IRA Contribution Limits. The 2019 contribution limit for Simple IRAs is $13,000. The catch-up contribution for those age 50 or older by December 31, 2019, is $3,000.

401(k), 403(b) and 457 Contribution Limits. The contribution limit for these plans’ employee deferrals is $19,000. The catch-up contribution for those age 50 or older by December 31, 2019, is $6,000.

Recommended Reading: Michigan Minimum Wage and Earned Sick Leave Act.

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