2008 Payroll Tax Changes

Jan 07, 2008 | Posted in Business, News

2008 Changes

Distribution Amounts
The annual benefit limitation under a defined benefit plan - the maximum amount such a plan may pay a participant each year - is $185,000.

Contribution Amounts
For defined contribution plans, such as 401(k)s, 403(b)s and 457s, the maximum contribution is $15,500 and theSIMPLE maximum contribution is $10,500.

Catch-up Contributions
For those over 50 theIRA catch-up contribution limit remains the same at $1,000. For 401(k)s, 403(b)s, 457s, and SEPs it is $5,000 and the SIMPLE catch up is $2,500.

Social Security Wage Base
The inflation-based wage base for determining the maximum amount of earnings subject to the Social Security tax will be $102,000 for 2008. The rate remains the same at 6.2%.

Medicare Tax
The Medicare Tax remains the same at 1.45%. There is no upper limit for the wage base.

Mileage Rates
The business mileage rate will remain at $0.505.

Pennsylvania Changes
Income Tax-PA Income tax rate remains the same at 3.07%.
SUTA - Employee Contributions to the PA Unemployment compensation fund will remain at .06%.

Area municipality tax rates remain the same for 2008.

Emergency Municipal Services Tax (formerly OPT)
EMST is changing its name to Local Services Tax.The rate remains the same. The tax now becomes a weekly payroll deduction and is payable at the end of each quarter.
* Millcreek - $10.00
* Lawrence Park - $52.00
* Harborcreek - $35.00
* Summit - $10.00
* City of Erie - $52.00

For a printable version, click here

content management, website design, e-commerce and web development services in Erie, Pennsylvania