Businesses are affected by each new law that is enacted on Capitol Hill. It's certainly no different with the recent fiscal cliff deal that was reached earlier this week, after several months of negotiations and rather tense moments between lawmakers. Under the new agreement, a 2011 payroll tax holiday expired, meaning that additional money will be taken out of almost every American worker's paycheck. This has left many small and midsize business owners concerned about what the changes mean for their operations and how they can deduct the accurate amounts from employees' wages. To help with these alterations, companies can integrate payroll technology
to ensure they are following the new U.S. payroll legislation
.Every worker impacted by payroll tax changes
In 2011, President Obama signed a temporary payroll tax decrease that dropped employees' Social Security tax deductions from 6.2 percent to 4.2 percent. The bill was passed to give Americans more money in their pockets, with the goal of boosting the nation's economy. However, during the recent fiscal cliff negotiations, lawmakers made the decision to let the tax cuts expire, resulting in rate increases for all workers.The Boston Globe reports
that employees at all income levels will begin to see more pay being taken out of the checks due to the passage of the fiscal cliff legislation. For example, individuals earning between $50,000 and $75,000 annually will see approximately $822 deducted from their take-home wages. The news source notes that while the payroll tax holiday did help Americans and the economy over the past two years, Congress - and members of both parties - decided to let it expire, as the Social Security program needs additional money.Small and midsize businesses have payroll tax worries
While American workers will be the ones most impacted by the new legislation, small and midsize businesses will be as well. This has led to growing concern over the fiscal cliff deal, as company owners are worried about how the decrease in individuals' disposable income will affect their operations, as well as how they will effectively implement these tax changes into their payroll processes, reports WWLP-TV
Although companies can't control how the payroll tax holiday expiration will affect the economy, they can alleviate the stress of figuring out tax alterations with payroll software
. These programs give owners the tools they need to accurately deduct the correct amounts from workers' paychecks, ensuring firms are staying compliant with all existing legislation.