Payroll Tax Holiday is Over

You may notice your paychecks are a little smaller this month.  This is due to the expiration of the payroll tax holiday.  The Social Security component of payroll and self-employment tax increases by 2% beginning January 1st.  This means the employee’s share of payroll tax is now 6.2% instead of 4.2%.  Self-employment tax is now 12.4% instead of 10.4%.  These taxes apply to wages or self-employment income up to $113,700 (Social Security limit).