New Oregon Employee Transit tax

Oregon employers must begin withholding a new statewide transit tax beginning July 1, 2018. There is no employer paid portion of the new transit tax; it is paid entirely by individual employees through payroll withholding. The tax must be withheld from wages of Oregon residents (regardless of where the work is performed) and wages of nonresidents of Oregon who perform services in Oregon.  Continue reading

Increased Social Security Payroll Taxes in 2017 for High Wage Workers

On October 18, 2016 the Social Security Administration (SSA) announced that the maximum amount of wages subject to the Social Security payroll tax will i2017-tax-update-1ncrease in 2017 by $8,700 to $127,200.  This adjustment, which takes place on January 1, 2017, is calculated by the SSA based on average wage increases.

Social Security payroll tax is collected with Medicare payroll tax as the Federal Insurance Contributions Act (FICA) tax.  In a traditional employment relationship, FICA taxes are paid by both employers and employees.  Employers and employees both pay 6.2% of taxable wage for the Social Security portion up to the annual maximum level and pay 1.45% of taxable wage for the Medicare portion.  There is no limit on the Medicare portion, however under a provision of the Affordable Care Act, highly compensated employees are required to pay an additional 0.9% in Medicare tax for all wages over $200,000 per year.  Employers are not required to pay this additional Medicare tax.

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