Quick Wage & Tax Guide for 2012
To assist small and medium size business owners with the changing payroll and tax related requirements, PrimePay has put together useful resources for payroll professionals to help keep you informed. These include payroll calendars, specific Federal tax rates and limits as well as links to State specific websites. Below is information on:
- Social Security Taxable Wage Base and Tax Rates
- Medicare Taxable Wage Base and Tax Rates
- FUTA Taxable Wage Base and Tax Rate
- Federal and State Minimum Wage Rates
- Pension Limits for Contributing to 401(k) Plans and Simple IRAs
- And more...
2012 Payroll Calendar
2012 Federal Wage & Tax Rates
Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. This limit is adjusted each year with changes in the national average wage index. This annual limit is called the contribution and benefit base. For earnings in 2012, the Social Security taxable wage base is $110,100.
FICA - Social Security (OASDI Only)
| Social Security Taxable Wage Base per Employee | $110,100 |
| Employer Tax Rate for Social Security | 6.2% |
| Employee Tax Rate for Social Security | 4.2%* |
| Self-Employed Tax Rate for Social Security | 10.4% |
FICA – Medicare (HI Only)
| Medicare Taxable Wage Base per Employee | No Limit |
| Employer and Employee Tax Rate for Medicare | 1.45% |
| Self-Employed Tax Rate for Medicare | 2.9% |
FUTA – Federal Unemployment Tax Act
| FUTA Taxable Wage Base per Employee | $7,000 |
| Employer Net Tax Rate | 0.6% |
* The rate of 4.2% is a temporary extension of the payroll tax cut for wages earned after December 31, 2011 and
before March 1, 2012. Whether the 4.2% rate will be extended through 2012 has yet to be determined.
Have Questions on Social Security or Medicare Tax Rates? Ask a PrimePay Representative
2012 Federal Minimum Wage Rates
Below are the Federal minimum wage rates for 2012.
Effective 7/24/2009
| Minimum Wage | Minimum with Tips | Maximum Credit for Tips | |
| Federal | $7.25 | $2.13 | $5.12 |
For information on state minimum wage rates, you can access the Department of Labor’s website by clicking on the link below.
State Minimum Wage Rates
2012 Pension Plan Limits
The Federal government sets dollar limits as to how much an employee can contribute to their company’s qualified retirement plan each tax year. These limits are based on the cost-of-living index. If an employee reaches the age of 50 during the current tax year, they will qualify for the “Catch Up” provision… only if it is an established provision of the Company’s 401(k) plan.
The IRS announced in October 2011 that in the 2012 tax year, the limits pertaining to 401(k) and other defined contribution plans will either remain unchanged or the inflation adjustments will be small.
| Standard | 'Catch Up' Provision | |
| 401(k) Limit for 2012 | $17,000 | $22,500 |
| Simple Plan IRA for 2012 | $11,500 | $14,000 |
For a more detailed list on the 2012 pension plan limits, please click here. This link will take you to the IRS website… detailing the 2012 limitations on a variety of retirement plans.
