Some employees may not see immediate results of tax cuts
The newly mandated 2 percent cut in social security taxes will eventually put more money in the pocket of employees. However, the increase may not occur as quickly as many imagine, according to Consumer Reports. The research agency revealed that the late passage of the tax cut means employees can expect to see 2010 level payments in their first paycheck of the new year.
The end result may be an imbalance in pay during the first month of 2011, said Scott Mezistrano, senior manager of government relations for the American Payroll Association, an agency which represents the payroll processing industry.
"[Changes may take until] the third paycheck to get it all right," Mezistrano told Consumer Reports. "It all depends on how quickly an employer can implement the new tax rate."
Through January 31, the federal government has given employers will provide leeway to businesses to implement the changes to their payroll, and until March 31 to correct any payroll errors that may occur during the transition.
The Social Security tax rate will fall to 4.2 percent for 2011 and will affect all workers making up to $106,800 per year. The cut should translate to an additional $1,000 in pay over the course of the year for someone making about $50,000 annually, Consumer Reports detailed.
The end result may be an imbalance in pay during the first month of 2011, said Scott Mezistrano, senior manager of government relations for the American Payroll Association, an agency which represents the payroll processing industry.
"[Changes may take until] the third paycheck to get it all right," Mezistrano told Consumer Reports. "It all depends on how quickly an employer can implement the new tax rate."
Through January 31, the federal government has given employers will provide leeway to businesses to implement the changes to their payroll, and until March 31 to correct any payroll errors that may occur during the transition.
The Social Security tax rate will fall to 4.2 percent for 2011 and will affect all workers making up to $106,800 per year. The cut should translate to an additional $1,000 in pay over the course of the year for someone making about $50,000 annually, Consumer Reports detailed.
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