| Below are the updated payroll and wage rates for 2024.
2024 PAYROLL WAGE and TAX ALERT
| Social Security (Employee & Employer Paid) |
| Maximum Taxable Earnings: |
$168,600
($160,600 in 2023) |
| Percent of Taxable Wages: |
6.2% |
| Maximum Withholding: |
$10,453.20 |
| Medicare (Employee & Employer Paid) |
| Maximum Taxable Earnings: |
No Limit |
| Percent of Taxable Wages: |
1.45% |
| Maximum Withholding: |
No Limit |
| Maximum Amount: |
No Limit |
| Additional Medicare Tax: |
0.9%
(on wages in excess of $200,000 in a calendar year per employee) |
| FUTA (Employer Paid) |
| Maximum Taxable Earnings: |
$7,000 |
| Percent of Taxable Wages: |
0.6% |
2024 CALIFORNIA PAYROLL AND WAGE
Minimum Wage Effective January 1, 2024
(Rate varies by county – check with your county) |
| For Employers ALL employer sizes (for some cities will increase on July 1st) |
$16 |
| (Rate: varies by county – check your county) |
|
| Fast food workers $20 as of April 1, 2024 (60 locations or more) |
|
| *Overtime pay is required for hours worked in excess of eight in a single day and/or forty hours in a workweek |
| SUI (Employer Paid) |
| Maximum Taxable Earnings: |
$7,000 |
| Employer Tax Rate: |
1.5%-6.2% |
| Employment Training Tax: |
0.1% |
| SDI (Employee Paid) |
| Maximum Earnings: |
No Limit
($153,164 in 2023) |
| Percent of Taxable Wages: |
1.1%
(Up from .9% in 2023) |
| Maximum Withholding: |
No Limit
($1378.48 in 2023) |
For the most part, employment payroll taxes must be remitted to the IRS and EDD on either the semi-weekly or monthly basis. In addition, some companies may be required to submit the payments electronically to the IRS. These rules change in each individual case every January 1.
For EDD, as of January 1, 2018 all quarterly forms and payments MUST be submitted electronically. Each employer must comply with the depository rules to avoid penalties. Please contact our office if you have any questions or refer to the IRS and EDD Employer’s Tax Guides for further guidance.
HOUSEHOLD EMPLOYERS (Federal and State Requirements)
Federal obligations are reported and paid with annual Federal Form 1040 filing; California requires quarterly filing when household wages reach $750 in a calendar quarter.
PENSION PROVISIONS
|
2024 |
2023 |
| Maximum Defined Contribution Plan Contributions §415(c) |
$69,000 |
$66,000 |
| SEP IRA |
$69,000 |
$66,000 |
| Maximum 401(k), 403(b) & 457 Deferral; |
$23,000 |
$22,500 |
| SIMPLES; §408 |
$16,000 |
$15,500 |
| Annual compensation Limit; §401; §404; §408 |
$345,000 |
$330,000 |
| Traditional or ROTH IRA |
$7,000 |
$6,500 |
Catch Up Amounts for Age 50+ Individuals
For individuals who have attained age 50 by the end of the year, the applicable dollar amount under §401(k) plan, §403(b) annuity, salary reduction SEP or §457 plan is increased as follows:
| Plan Type |
2024 |
2023 |
|
§401(k); §403(b); SARSEP; §457
|
$7,500 |
$7,500 |
|
SIMPLES
|
$3,500 |
$3,500 |
|
Traditional or ROTH IRA
|
$1,000 |
$1,000 |
STANDARD MILEAGE RATES
Beginning January 1, 2024, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
- 67 cents per mile for business miles driven;
- 22 cents per mile driven for medical or moving purposes; and
- 14 cents per mile driven in service to a charitable organization.
2008 Law for Employers
Effective January 1, 2008, all employers are required to notify all of their employees of the federal Earned Income Tax Credit (EITC).
Assembly Bill 650, Chapter 606 (Lieu and Jones) requires any employer who is subject to and is required to provide unemployment insurance to employees, to notify all employees that they may be eligible for the EITC. Employers shall give notification to employees within one week before or after the Wage and Tax Statement (Form W-2) or Miscellaneous Income (Form 1099) is given. This new law also requires the employer to process the IRS Form W-5 for advance payments of the EITC if requested by the employee.
You must provide notification to your employees by either handing it directly to your employee or mailing it to your employee’s last known address. Posting of this information on any employee bulletin board will not satisfy the notification requirement.
The notification shall include instructions on how to obtain any notices available from the Internal Revenue Service for this purpose, including, but not limited to, the IRS Notice 797 and Form W-5, or any successor notice or form, or any notice created by you, as long as it contains substantially the same language as the notice below.
NOTICE TO EMPLOYEES
Based on your annual earnings, you may be eligible to receive the earned income tax credit from the federal government. The earned income tax credit is a refundable federal income tax credit for low-income working individuals and families. The earned income tax credit has no effect on certain welfare benefits. In most cases, earned income tax credit payments will not be used to determine eligibility for Medicaid, supplemental security income, food stamps, low-income housing or most temporary assistance for needy families’ payments. Even if you do not owe federal taxes, you must file a tax return to receive the earned income tax credit. Be sure to fill out the earned income tax credit form in the federal income tax return booklet.
For information regarding your eligibility to receive the earned income tax credit, including information on how to obtain the IRS Notice 797 or Form W-5, or any other necessary forms and instructions, contact the Internal Revenue Service at 1-800-829-3676 or through its Web site at www.irs.gov. |
