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As of January 1, 2013, the effective rate for the Social Security payroll tax has returned to its normal level of 6.2%.
During 2011 and 2012, this normal tax rate was temporarily reduced by 2%. Adopted by Congress as a limited economic stimulus, this “payroll tax holiday” meant a short-term boost to Americans’ take-home pay. Always designed as a temporary measure, this 2% tax holiday expired on December 31, 2012. As a result, your paychecks for 2013 are showing an increase of 2% in deductions for Social Security taxes, as the tax reverts to its historic rate of 6.2%.
In another change for 2013, Social Security taxes are now paid on income up to a threshold of $113,700, up from $110,100 last year.
