CCH Logo
Contact Us | CCH Online Store | Site Map    

  
navigation tabnavigation tab Home 
navigation tabnavigation tab About Us 
navigation tabnavigation tab Order Products 
navigation tabnavigation tab Press Center 
navigation tabnavigation tab Customer Service 
navigation tabnavigation tab Career Opportunities 
navigation tab
   HomePress CenterPress Releases
 
Press Releases
List By Date
Banking/Finance Institutions
Business Law
Corporate
Health Care and Entitlements
Human Resources
Securities
Tax
News Archives
 

Contact Information

Leslie Bonacum
847-267-7153
mediahelp@cch.com
Neil Allen
847-267-2179
neil.allen@wolterskluwer.com

For Top Earners, Payroll Tax Takes Bigger Bite Next Year

(Riverwoods, ILL., October 21, 1998) -- If you are a highly paid employee, your taxes just went up by $260.40 for 1999, according to CCH INCORPORATED, a leading provider of pension, tax and business law information. This is due to an increase in the wage base on which Social Security taxes are due, from $68,400 in 1998 to $72,600 in 1999. CCH’s Payroll Management Guide reported the increase based on figures released by the Labor Department and the Social Security Administration. The amount will be officially published in the Federal Register by the end of October.

The tax increase will show up in the amount of FICA (Federal Insurance Contribution Act) tax deducted from the paychecks of those earning above the 1998 wage base. Although the tax rate for the Old-Age, Survivors and Disability Insurance (OASDI) portion of FICA remains at 6.2 percent, the amount of wages subject to the tax can, and usually does, increase each year, based on a national wage index. The $72,600 wage base for 1999 is $1,200 higher than an earlier estimate published in the 1998 Annual Report of the Board of Trustees of the Federal, Old-Age, Survivors and Disability Insurance (OASDI) Trust Funds issued in April of this year. The taxes paid by employees are matched by identical amounts paid by employers into the Social Security system.

The tax rate for this "Hospital Insurance," or Medicare portion of FICA, is 1.45 percent and applies to every dollar of earnings. This amount is also matched by employers.

Taxes for self-employed individuals use the same earnings base, but their rates are double those of employees since they must also pay the "employer" portion of the taxes. This means that high-earning, self-employed individuals may owe as much as $520.80 in additional self-employment tax in 1999. However, they can recoup some of this amount through a deduction on their federal income tax.

Future Benefits Also Affected

The "wage base" is also a "benefits base," CCH noted. Only earnings up to the wage base are considered in calculating Social Security benefits. Thus, those who pay more now should receive more later. Some private pensions use the amount of "covered compensation" -- that is, compensation up to the wage base -- in calculating their benefits as well.

Domestic Workers

In 1999, there will be no increase in the amount of wages paid to a domestic worker that is not subject to FICA taxes. You can pay a domestic worker such as a maid or baby sitter up to $1,100 in 1999 without having to wrestle with federal withholding on the wages.

About CCH INCORPORATED

CCH INCORPORATED, Riverwoods, Ill., is a leading provider of health and human resources information, including Payroll Management Guide, Pension Plan Guide, Employee Benefits Management, Social Security Reporter and Unemployment Insurance Reports. CCH also provides tax and business law information in print and electronic form for accounting, legal and healthcare professionals. CCH is a wholly owned subsidiary of Wolters Kluwer U.S.

-- ### --

nb-98-84

       


   © 2024, CCH INCORPORATED. All rights reserved.   

  Back to Top | Print this Page   
spacer