Quick Wage & Tax Guide for 2009 & 2010
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...
2009 & 2010 Federal Wage & Tax Rates
For the first time since 1975, the Social Security Administration (SSA) announced it will not be increasing the Social Security wage base. In past years, the annual wage base increase has been due to an automatic Cost-of-Living Adjustment (COLA). Since there will not be a COLA increase in the amounts paid to Social Security beneficiaries in 2010, the wage base will remain unchanged at $106,800… which is the 2009 amount.
FICA - Social Security (OASDI Only)
| Social Security Taxable Wage Base per Employee | $106,800 |
| Employer and Employee Tax Rate for Social Security | 6.2% |
| Self-Employed Tax Rate for Social Security | 12.4% |
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 | 0.8% |
Have Questions on Social Security or Medicare Tax Rates? Ask a PrimePay Representative
2010 Minimum Wage Rates
Below are the Federal minimum wage rates for 2010.
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.
2009 & 2010 Pension 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 2009 that in the 2010 tax year, the limits pertaining to 401(k) and other defined contribution plans will not change from 2009.
| Standard | 'Catch Up' Provision | |
| 401(k) Limit for 2009 & 2010 | $16,500 | $22,000 |
| Simple Plan IRA for 2009 & 2010 | $11,500 | $14,000 |
For a more detailed list on the 2010 pension plan limits, please click here. This link will take you to the IRS website… detailing the 2010 limitations on a variety of retirement plans.
For a more detailed list on the 2009 pension plan limits, please click here. This link will take you to the IRS website… detailing the 2009 limitations on a variety of retirement plans.
