New Social Security tax wage baseįICA, which is comprised of Social Security and Medicare taxes, is a fixed rate: 7.65% on the employer as well as an equal rate on the employee. While contributions to the plan are made by the employee, the set up may mean some additional administrative costs.

If your company doesn’t have a qualified retirement plan, you may have to enroll employees in your state’s Secure Choice Savings Program if your state has one (about a dozen states do) and your company is not exempt.

If you have a qualified retirement plan with employer contributions-as the only plan contributions or contributions that are tied to employee contributions-employee compensation will determine what it costs you for the year.

Alternatively, the company may pay the cost (capped at $5,000 in 2022 unless Congress continues the $10,500 cap that applied for 2021). This can be financed through employee contributions made on a pre-tax basis.

To bring employees back to the workplace, you may need to offer a dependent care assistance plan.

To attract and retain employees during this tight labor market, you may want to introduce or increase your plan offerings. Check with your state unemployment division if you have not yet received a notice about your 2022 rate.Īnd there’s also workers compensation, the cost of which reflects your payroll.

Due to high unemployment during the pandemic, many companies likely face a higher rate for 2022. This tax typically is based on a company’s experience (how many unemployment claims are made against it). Because this tax based on wages capped at up to $7,000 per employee, the cost won’t change for 2022 unless you add employees to your staff. Recognize that increasing wages also means higher payroll taxes. With the hike in the inflation rate in recent months, actual increases could be higher. In the summer, WorldAtWork projected compensation increases for 2022 of about 3.3%. Check with your state and city now to determine the applicable rate for the coming year.Įven if minimum wage increases aren’t an issue for you, if you’re trying to help your staff at least keep pace with inflation or simply reward them for work well done, it’s going to cost you.

A number of cities have higher rates than the states they’re in. Guess what-all these places have increases in 2022. may be increased annually due to inflation. What’s more, the minimum wage rate in 18 states and D.C. While the federal minimum wage has not been adjusted, and is the standard in 7 states, most states have their own higher rate which takes precedence over the lower federal rate. You may be required to increase employee wages due to minimum wage increases in your state or locality that go into effect on January 1, 2022. Here are some areas to look at carefully.

Epson adjustment programs