Payroll Tax Rates for 2002

John P. Kruczek, University Controller

The new income tax withholding rates will go into effect January 1, 2002. The Tables for Percentage Method of WithholdingTables for Percentage Method of Withholding may be used to determine your biweekly withholding tax in calendar year 2002.

The Social Security Administration has announced that the Social Security (OASDI) wage base will be increased from $80,400 to $84,900 in the year 2002. 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 at 7.65% for the calendar year 2002. With the change in wage base, the maximum Social Security tax employees and employers will each pay in 2002 will increase from $4,984.80 to $5,263.80. There is no maximum on the Medicare tax.

The supplemental tax rate will decrease from the present 27.5% to 27% on January 1, 2002, and will affect the calculation of gross payment on Departmental Superior Accomplishment Awards defined in Florida Rule 6C1- 3.040(2)(a)(6). This rule allows departments to pay employees who meet certain criteria a net check of $50.00 and the employer pays all the taxes. The gross amount of the award was $77.10 and will be $76.51. Any Departmental Superior Accomplishment Awards payments for the payday, R67, on January 11,2002 will require the new amount of $76.51. In addition to the effect on Departmental Superior Accomplishment Awards, the tax rate change will affect the amount withheld on Bonus and Extra State Compensation payments.

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 or email Ms. Donna McClure dmclure@ufl.edu ; Greg McEachern gmc1@ufl.edu ; or Murphy Miller mjmiller@ufl.edu in University Payroll Services at 392-1231.