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State Employees: Social Security Tax Rate

Note: December 2011 pay checks processed with higher tax rate.

To: State Employees

Re: Temporary Social Security Employee Tax Rate Reduction

As announced in various news media, Congress passed and the President signed into law on December 23, 2011, the Temporary Payroll Tax Cut Continuation Act of 2011 (H.R. Bill 3765). This legislation provides that the Social Security tax rate paid by employees to continue at 4.2% for wages paid through February 29, 2012. Changes will be necessary for December 2011 payroll as well as any pay with a January and February 2012 issue date.

Since the December 2011 pay checks, that issued January 1, 2012 were processed prior to Congress taking action and were made using the higher tax rate of 6.2%, correcting adjustments are needed. For the majority of employees, the State Controller’s Office (SCO) will issue the adjustments with the January 2012 paychecks (to be issued dated February 1, 2012). All other employees will receive their adjustment, if applicable, in a separate payment. The adjustment payments should all be issued by February 29, 2012.  The SCO has provided an Social Security Tax FAQ list to help answer questions you may have.

If you have any questions, please contact your payroll technician or call the Human Resources Service Center at x6771.