Payroll Tax Rates for 1998

John P. Kruczek, University Controller

New income tax withholding rates will go into effect in 1998. The table for Percentage Method of Withholding shown on the reverse side may be used to determine your 1998 biweekly withholding tax.

In addition, the following taxable amounts and rates will change effective January 1, 1998. The Social Security Administration has announced that the 1998 Social Security (OASDI) wage base will be increased from $65,400 to $68,400. 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 1998. With the change in wage base, the maximum Social Security tax employees and employers will each pay in 1998 will increase from $4,054.80 to $4,240.80. There is no maximum on the Medicare tax.

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.

Tables for Percentage Method of Withholding
For Wages Paid in 1998
If the Payroll Period is Biweekly

(a) SINGLE person (including head of household)

If the amount of wages      The amount of 
(after subtracting          income Tax to 
 withholding                withhold is:
 allowances) is:

Not over $102.........$0

Over-    But Not                     of excess over-
         Over-
$   102  $ 1,035      15%                    $   102
$ 1,035  $ 2,210      $  139.95  plus 28%    $ 1,035
$ 2,210  $ 4,987      $  468.95  plus 31%    $ 2,210
$ 4,987  $10,769      $1,329.82  plus 36%    $ 4,987
$10,769               $3,411.34  plus 39.6%  $10,769

(b) MARRIED person -

If the amount of wages      The amount of 
(after subtracting          income Tax to 
withholding                 withhold is:
allowances) is:

Not over $248.........$0

Over-    But Not                     of excess over-
         Over-
$   248  $ 1,798       15%                   $   248
$ 1,798  $ 3,710       $  232.50 plus 28%    $ 1,798
$ 3,710  $ 6,167       $  767.86 plus 31%    $ 3,710
$ 6,167  $10,879       $1,529.53 plus 36%    $ 6,167
$10,879                $3,225.85 plus 39.6%  $10,879

------------------------------------------------------------

       ALLOWANCE TABLE

  NUMBER OF             TOTAL AMOUNT
 WITHHOLDING           OF WITHHOLDING
  ALLOWANCES             ALLOWANCES

      0                 $     0.00
      1                 $   103.85
      2                 $   207.70
      3                 $   311.55
      4                 $   415.40
      5                 $   519.25
      6                 $   623.10
      7                 $   726.95
      8                 $   830.80
      9                 $   934.65
     10                 $ 1,038.50

Over 10 -- Multiply amount of one withholding allowance by number of allowances claimed.