Monday, January 10, 2011

Payroll Tax Changes for 2011

Nanny Payroll Tax Changes for 2011 By Kathy Webb

It's the start of a new year and time to do your taxes! First let your employers know immediately that there has been changes to payroll deductions.

Employers, please make sure to recalculate your nanny's payroll deductions prior to issuing the first 2011 payroll. There have been changes to the Social Security tax rate, the Federal income tax rates, and many state income tax rates.

1. The Making Work Pay temporary tax credit, enacted in March 2010 expired December 31, 2010. This means that even though Congress and President Obama extended the Bush era income tax rates, most nannies will see an increase in their withhold tax due to the credit expiration.

2. The Employee Social Security Tax contribution rate is reduced for 2011 only to 4.2%. The nanny employer rate remains at 6.2%.

HomeWork Solutions' popular Nanny Tax Calculator has been updated to include the 2011 employment tax changes. Please be sure to select 2011 from the tax year drop down. Click here to see the entire article and to visit the blog.

Are you tax compliant? Do you and your employers pay your payroll taxes?


Steph 6 said...

My paycheck has been $14 more per week and I thought they were just paying me a little more for coming in early nearly every day. Ha! Maybe I ought to ask! Ha!

Fiona Littleton said...

I thought nannies were to BENEFIT from payroll tax changes NOT have more taken out from their taxes as this link claims!!!

Anonymous said...

Nope I'm paid under the table as are most domestic workers. I should be able to save enough myself for emergencies and IRAs. Most nannies don't pay taxes for a reason - they have much more spending money. At least I'm smart to invest and save my money. No one pays taxes unless they are forced to.

Anonymous said...

I'm making less now and all my friends are getting more... I don't think that's fair at all!!!

payrolling said...

In payroll factor, they saving the records like deductions, overtime calculations, half-day works payments, leave calculation, festival allowances and more affects the calculation of payrolls.