Payroll Tax Rates for 1996

Published: November 29th, 1995

Category: Memos

John P. Kruczek, University Controller

New income tax withholding rates will go into effect in 1996. The table for Percentage Method of Withholding shown on the reverse side may be used to determine your 1996 biweekly withholding tax.

In addition, the following taxable amounts and rates will change effective January l, 1996. The Social Security Administration has announced that the 1996 social security (OASDI) wage base will be increased from $61,200 to $62,700. All taxable wages and income 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 1996. With the change in wage bases, the maximum social security tax employees and employers will each pay in 1996 will increase from $3,794.40 to $3,887.40. 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%.

If you have any questions concerning these changes, please call Mrs. Peggy Farrant or Mrs. Lynn Slaughter in University Payroll Services at 392-1231.

 

Tables for Percentage Method of Withholding For Wages Paid in 1996 If the Payroll Period is Biweekly

(a) SINGLE person (including head of household)             (b) MARRIED person

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

Not over $101                 $0                             Not over $246                $0

Over       But Not Over                of excess over  Over   But not over               of excess over
$101             $979    15%                  $101     $247      $1,702       15%                  $247
$979           $2,O66   $131.70 plus 28%      $979     $1,702    $3,449      $218.25 plus 28%    $1,702
$2,066         $4,721   $436.06 plus 31%      $2,066   $3,449    $5,840      $707.41 plus 31%    $3,449
$4,721         $10,200  $l,259.11 plus 36%    $4,721   $5,840    $10,304     $1,448.62 plus 36%  $5,840
$10.200                 $3,231.55 plus 39.6%  $10,200  $10,304               $3,055.68 plus 39.6%

                  ALLOWANCE TABLE

       NUMBER OF                    TOTAL AMOUNT
      WITHHOLDING                  OF WITHHOLDING
       ALLOWANCES                   ALLOWANCES

 0                                  $  0.00
 1                                  $ 98.08
 2                                  $ 196.16
 3                                  $ 294.24
 4                                  $ 392.32
 5                                  $ 490.40
 6                                  $ 588.48
 7                                  $ 686.56
 8                                  $ 784.64
 9                                  $ 882.72
10                                  $ 980.80

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

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