The income threshold for social security taxes in the US will go up next year, leaving the average taxpayer US$279 per annum worse off.
At the moment, employees have 6.2% of their earnings withheld for social security-based tax purposes, while employers contribute a further 6.2%. This means that workers today pay social security taxes on their first US $128,400 of earnings, but as of next year, the figure will rise to US$132,900.
According to The Motley Fool, the move will result in the average employee having US$279 a year less in their pay packet. Self-employed people will be even worse off as they will required to pay the whole 12.4% themselves, although a proportion of the figure will be tax-deductible.
On top of their social security payments, salaried staff will also have to contribute 1.45% of their earnings to the Medicare tax, on which there is no ceiling. Self-employed individuals, on the other hand, will be required to pay 2.9% of their total income to the Medicare fund.
Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.
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The income threshold for social security taxes in the US will go up next year, leaving the average taxpayer US$279 per annum worse off.
At the moment, employees have 6.2% of their earnings withheld for social security-based tax purposes, while employers contribute a further 6.2%. This means that workers today pay social security taxes on their first US $128,400 of earnings, but as of next year, the figure will rise to US$132,900.
According to The Motley Fool, the move will result in the average employee having US$279 a year less in their pay packet. Self-employed people will be even worse off as they will required to pay the whole 12.4% themselves, although a proportion of the figure will be tax-deductible.
On top of their social security payments, salaried staff will also have to contribute 1.45% of their earnings to the Medicare tax, on which there is no ceiling. Self-employed individuals, on the other hand, will be required to pay 2.9% of their total income to the Medicare fund.
Gill Oliver is a business and property journalist who has written for The Daily Mail/Mail Online's This is Money, The Press Association and many national and regional newspapers and magazines.
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New York introduces payroll tax system to bypass federal reform
US aims to stop citizens in high-tax states circumventing SALT cap
