The new year often brings some types of changes that affect businesses in New Jersey. This year, both New Jersey and the federal government have changes to employer withholdings that affect any business in New Jersey. It is essential to know the changes and make sure they are implemented immediately with the first run of payroll checks issued in 2019.
New Jersey Employer Withholding Changes
In 2019, New Jersey has raised the amount of income in which the State Unemployment Insurance tax rates will apply and added a Workforce Development Partnership Fund tax rate as well. In 2018, the Unemployment Insurance tax rates applied to the first $33,700 of income. However, in 12019, the tax rate will apply to the first $34,400 of employee earnings. In addition, the employees will see a Workforce Development Partnership Fund tax rate of .0425%.
In contrast, in 2019, New Jersey Temporary Disability and Family Leave Insurance rates have decreased. The disability rate is .17%, instead of the .19% in 2018. The Family Leave Insurance rate is now .08% instead of the .09% it was in 2018.
Federal Employer Withholding Changes
The federal changes are related to FICA and Medicare withholdings. In 2018, the Social Security Payroll tax will apply to the maximum earnings of $132,900 instead of $128,400 in 2018. In regard to Medicare, the tax rate of 2.9% will be split evenly between the employer and the employee. In addition, the Affordable Care Act will place .9% on the employee-paid portion of the Medicare FICA tax for those who are considered high-wage earners. High wage earners are those makings more than $200,000 as a single tax payer, $125,000 for a married taxpayer filing separately, and $250,000 for married tax payers filing jointly. It is also important to note that self-employed tax payers are responsible to pay the entire FICA tax rate of 15.3% on the first $132,900 of self-employment income as well as the 2.9% Medicare FICA tax.
A Professional Payroll Advisor Helps with Employer Withholdings
The above mentioned withholdings changes are slight in comparison to the entirety of employer responsibilities regarding payroll and running a business. However, if missed, these withholdings can accumulate to a large sum of money as well as fines and penalties. Therefore, it is essential that employers are aware of the changes and implement them immediately. An employer who handles payroll on his or her own has numerous issues to handle when running a business and may easily miss these changes. However, a company that uses a professional payroll company will help make sure these responsibilities are in the hands of a trusted advisor and not missed.
A professional payroll company makes it their job to make sure changes to payroll deductions and laws are implemented on the first day they take effect, whether it is the first of the year or at another time of the year. Moreover, if something is missed, the ownness is on the payroll company, as opposed to the employer. These two benefits, alone, let alone the time freed up from having to handle payroll, should be enough for any business to work with a qualifies payroll company.
If you are looking for a company that can help make sure your company is compliant with any and all payroll issues, contact the experts at Fusion Employer Services at 1-866-FES-4978, Their team of qualifies payroll and HR specialists will be happy to answer your questions.