IRS published Notice 1036, Early Release Copies of the 2016 Percentage Method Tables for Income Tax Withholding. Here are some majors changes an employer should know for Year 2016 payroll processing.
Social Security and Medicare Tax for 2016
- For social security, the tax rate is 6.2% each for the employee and employer, unchanged from 2015.
- The social security wage base limit is $118,500, unchanged from 2015.
- The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2015. There is no wage base limit for Medicare tax.
IRS Announces new 2016 Tax Brackets and Standard Deduction
The new standard deduction for each dependent is $4050.00, which was $4000.00 in 2015.
You can view
2016 Payroll Income Tax Withhold Tables here to see tax brackets changes and more details.