11-P-020 Change in Social Security Employee Tax Rate (Supersedes 09-P-009)

DATE:	December 17, 2010
SUBJECT:	Change in Social Security Employee Tax Rate
EFFECTIVE DATE:	January 1, 2011
CONTACT:	Jennifer Holthaus	(785) 368-6313	Jennifer.Holthaus@da.ks.gov
APPROVAL:
SUMMARY:	Social Security Employee Tax Rate Decreases to 4.2% effective January 1, 2011

As a result of the passage of the Tax Relief Act of 2010, the employee OASDI tax rate is reduced from 6.2% to 4.2% effective for wages paid in 2011.  The employer OASDI tax rate remains at 6.2%.  The Social Security wage base for OASDI will continue to be $106,800 for calendar year 2011.  Therefore, the maximum OASDI employee contribution for 2011 will be $4,485.60, a $2,136.00 decrease from the 2010 maximum of $6,621.60.   There continues to be no limit on wages subject to the Medicare tax in 2011.  Medicare tax rates for employers and employees remain at 1.45%.

For Federal employees at Kansas State University who were hired prior to January 1, 1984, the employee contribution rate for reduced FICA remains at 1.45 % on all wages subject to the tax (there has been no maximum contribution since January 1, 1994).  Federal employees hired after January 1, 1984 will have a maximum contribution of $4,485.60 for OASDI and no maximum for Medicare. 

For Kansas Police and Fireman’s program participants who are subject to the mandated Medicare coverage, the contribution rate remains at 1.45% on all wages subject to the tax (there has been no maximum contribution since January 1, 1994).

The Division of Accounts and Reports, Payroll Systems Team is responsible for making the necessary updates to the SHARP payroll system.  Regents’ institutions are responsible for ensuring these changes are reflected in their individual systems.

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