Payroll Tax Rates for 1997
John P. Kruczek, University Controller
New income tax withholding rates will go into effect in 1997. The table for Percentage Method of Withholding shown on the reverse side may be used to determine your 1997 biweekly withholding tax.
In addition, the following taxable amounts and rates will change effective January 1, 1997. The Social Security Administration has announced that the 1997 Social Security (OASDI) wage base will be increased from $62,700 to $65,400. All taxable compensation will also be subject to the 1.45% Medicare tax. The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, remains 7.65% for 1997. With the change in wage base, the maximum Social Security tax employees and employers will each pay in 1997 will increase from $3,887.40 to $4,054.80. There is no maximum on the Medicare tax.
The flat rate for withholding federal income tax from supplemental wages (e.g., bonuses, commissions, awards) will remain at 28%.
Please share this information with your staff who are responsible for the preparation of budgets, sponsored research proposals, and departmental payrolls. If you have any questions concerning these changes, please call Ms. Lynn Slaughter or Ms. Lawanna Reaves in University Payroll Services at 392-1231.