Payroll Tax Rates for 2003
John P. Kruczek, University Controller
The new income tax withholding rates will go into effect January 1, 2003. The Tables for Percentage Method of Withholding may be used to determine your biweekly withholding tax in calendar year 2003.
The Social Security Administration has announced that the Social Security (OASDI) wage base will be increased from $84,900 to $87,000 in the year 2003. 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 2003. With the change in wage base, the maximum Social Security tax employees and employers will each pay in 2002 will increase from $5,263.80 to $5,394.00. There is no maximum on the Medicare tax.
The supplemental tax rate will remain at 27% for 2003. The supplemental tax rate is used to calculate the gross payment amount of Departmental Superior Accomplishment Awards. These awards allow 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 continues to be $76.51 for 2003. Bonus and Extra State Compensation payments are also taxed at the supplemental rate.
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 email@example.com; Greg McEachern firstname.lastname@example.org; or Steve Sauls email@example.com in University Payroll Services at 392-1231.