Use new payroll tax to boost 401(k) rates
Now’s the perfect time to really push your employees to bump up their 401(k) contributions.
Reason: They can increase their retirement savings with virtually no impact to their take-home pay — thanks to President Obama’s extension of the Bush-era tax cuts.
The tax cuts include a one-year reduction in workers’ Social Security taxes, which changed from 6.2% in 2010 to 4.2% in 2011. This means employees will see an unexpected increase in their checks.
To really drive home the point, you may want to show employees exactly what the tax change will mean for them.
For example: An employee making $50,000 annually will save $1,000 per year because of the decrease in Social Security taxes.
That extra $1,000 could be added to his or her 401(k) without much change in the pay the person’s used to taking home.
- Share on
Free Training & Resources
White Papers
Provided by UJET
White Papers
Provided by Anaplan
Further Reading
Looks like AI won’t be taking the place of all those vacant jobs after all. CEOs at bigger companies — some who laid off a lot ...
A new joint employer rule is on the table. The DOL’s proposed standard could determine when your organization shares liability with a...
After several years of volunteer work, three individuals filed a lawsuit under the Fair Labor Standards Act (FLSA), saying they should have...
An Oregon restaurant recently learned a costly lesson about overtime and tip pool rules after a federal investigation found it had shortcha...
The IRS has explained how to handle taxes if a retirement plan participant doesn’t cash a distribution check and another check is issued....
A rule that hadn’t changed since 1954 may be getting an update. The IRS has proposed eliminating the 1099 filing requirement for paym...
