Payroll Tax Cut Means More $ in Your Pocket

A payroll tax cut reduces the amount withheld for Social Security, resulting in more take home pay. 

 

For one year The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 provides a two percent payroll tax cut for employees.   The amount withheld for Social Security will be reduced from 6.2 percent to 4.2 percent for individuals and must be implemented in employee paychecks no later than January 31.   If the new withholding rate is not implemented by the employers’ first payroll processing in January, employers must make an offsetting adjustment in the employees' pay no later than the end of the first calendar quarter.