Payroll Tax Rates and Contribution Limits for 2022

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Below are federal payroll tax rates and benefits contribution limits for 2022.

Social Security Tax

In 2022, the Social Security tax rate is 6.2% for employers and employees, unchanged from 2021. The Social Security wage base is $147,000 for employers and employees, increasing from $142,800 in 2021. Self-employed people must pay 12.4% on the first $147,000.

Medicare Tax

In 2022, the Medicare tax rate for employers and employees is 1.45% of all wages, unchanged from 2021. Self-employed people must pay 2.9% on all net earnings.

Additional Medicare Tax

In 2022, the additional Medicare tax remains unchanged at 0.9%. This tax applies to wages and self-employment income over certain thresholds ($200,000 for single filers and $250,000 for joint filers).

401(k) Limits

In 2022, the maximum contributions to traditional and safe harbor plans are as follows:

  • Employee (age 49 or younger) = $20,500, up from $19,500 in 2021.
  • Employee catch-up (age 50 or older) = $6,500, unchanged from 2021.
  • Employee and employer (age 49 or younger) = $61,000, up from $58,000 in 2021.
  • Employee and employer (age 50 or older) = $67,500, up from $64,500 in 2021.

Employees can contribute up to $14,000 to a SIMPLE 401(k) plan, up from $13,500 in 2021.

HSA and HDHP Limits

In 2022, the maximum contributions to a health savings account are as follows:

  • Employer and employee = $3,650 (self only), $7,300 (family).
  • Catch-up amount (age 55 or older) = $1,000.

In 2022, the limits for a high-deductible health plan are as follows:

  • Minimum deductibles = $1,400 (self only), $2,800 (family).
  • Maximum out-of-pocket amounts = $7,050 (self only), $14,100 (family).

FSA Limits

In 2022, employees can contribute:

  • Up to $2,850 to a health flexible spending account, increasing from $2,750 in 2021.
  • Up to $5,000 to a dependent care FSA if filing single or jointly, and up to $2,500 if married but filing separately. The American Rescue Plan temporarily raised the dependent care FSA limits in 2021 to $10,500 and $5,250, respectively. These increases do not apply in 2022.

QSEHRA Limits

In 2022, employers with a qualified small employer health reimbursement arrangement can reimburse employees for health care expenses as follows:

  • $5,450 (self only), up from $5,300 in 2021.
  • $11,050 (family), up from $10,700 in 2021.

Commuter Benefits Limit

In 2022, employees can contribute up to $280 per month for qualified commuter benefits (e.g., mass transit and parking), up from $270 per month in 2021. This limit includes any employer contributions.

Adoption Assistance Exclusion Limit

In 2022, up to $14,890 in employer-sponsored adoption assistance may be excluded from an employee’s gross wages, increasing from $14,440 in 2021.

Remember, these are all federal rates and limits. Be sure to check with the necessary agencies for state and local payroll rates.

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