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Starting Jan. 1, 2022, the maximum earnings subject to the Social Security payroll tax will increase by $4,200 to $147,000—up from the $142,800 maximum for 2021, the Social Security Administration (SSA) announced Oct. 13. The SSA also posted a fact sheet summarizing the 2022 changes.The taxable wage cap is subject to an automatic adjustment each year based on increases in the national average wage index (not the inflation rate), calculated annually by the SSA. Payroll Taxes: Cap on Maximum Earnings Type of Payroll Tax 2022 Maximum Earnings 2021 Maximum Earnings Social Security $147,000 $142,800 Medicare No limit No limit Source: Social Security Administration. The growth of the Social Security wage cap from $127,200 in 2017 to 147,000 in 2022 represents more than a 15.5 percent increase over the past five years.The $4,200 increase for 2022, however, is smaller than the 2021 increase of $5,100, up from the $137,700 maximum for 2020, reflecting constraints on wage increases during the height of the COVID-19 pandemic.Inflation Impacts Benefits PaymentsMeanwhile, monthly Social Security and Supplemental Security Income benefits for more than 64 million people in the U.S. will increase by 5.9 percent in 2022—the biggest cost-of-living (COLA) adjustment since the 1980s—the SSA also announced, reflecting this year’s inflation spike. The adjustment will boost the average monthly retirement benefit by $92 to roughly $1,657. The Senior Citizens League, an advocacy group, called the benefits increase “the highest COLA that most beneficiaries living today have ever seen,” but added that “a high COLA means exceptionally high inflation is impacting consumers.”FICA RatesSocial Security and Medicare payroll taxes are collected together as the Federal Insurance Contributions Act (FICA) tax. FICA tax rates are statutorily set and can only be changed through new tax law.Social Security is financed by a 12.4 percent payroll tax on wages up to the taxable earnings cap, with half (6.2 percent) paid by workers and the other half paid by employers. Self-employed workers pay the entire 12.4 percent.For employers and employees, the Medicare payroll tax rate is a matching 1.45 percent on all earnings (self-employed workers pay the full 2.9 percent), bringing the total Social Security and Medicare payroll withholding rate for employers and employees to 7.65 percent—with only the Social Security portion limited to the taxable maximum amount. FICA Rate (Social Security + Medicare Withholding)Employee7.65%(6.2% + 1.45%)Employer7.65%(6.2% + 1.45%)Self-Employed15.3%(12.4% + 2.9%) Note: For employed wage earners, their Social Security portion is 6.2% on earnings up to the taxable maximum. Their Medicare portion is 1.45% on all earnings. The payroll tax rates shown above do not include an additional 0.9 percent in Medicare taxes paid by highly compensated employees on earnings that exceed threshold amounts based on their filing status:$250,000 for married taxpayers who file jointly.$125,000 for married taxpayers who file separately.$200,000 for single and all other taxpayers.These wage thresholds, set by law, do not adjust for inflation and therefore apply to more employees each year.Employers must withhold the additional Medicare tax from wages of employees earning more than $200,000 …
New studies highlight changes to compensation for HR executives and staff, as well as the ways in which the pandemic has changed how HR professionals work and the challenges they face. HR Executive Pay Trends, published in October by Equilar, a research firm that tracks data on corporate leaders, analyzes compensation for HR executives at the 500 largest (by revenue) publicly traded U.S. companies.”As concurrent trends in corporate employment have led to ascending roles and responsibilities, HR executives have been compensated accordingly,” wrote study author Dan Marcec, Atlanta-based senior editor at Equilar.HR executive compensation is on a steady rise, according to the report. Median total compensation for HR executive roles in the largest 500 companies increased 6 percent over the past fiscal year, up from $1.9 million to $2 million in 2021, taking into account base salaries and incentive awards, including stock grants, but excluding pensions, deferred compensation and perquisites.Among the 500 largest U.S. companies: Companies with more than $50 billion in revenues awarded $3.3 million at the median to their HR executives in 2021, up from $3.1 million in 2021. Companies with less than $10 billion in revenues (but still among the 500 largest) awarded $1.5 million at the medium, up from 1.4 million.Performance awards are the most common pay component, and performance equity accounted for at least one-quarter and up to one-third of the average HR executive pay package. Women Take the Lead”Given the importance of workforce and human capital issues in corporate society right now, it’s noteworthy that HR executive roles are heavily dominated by women, both from a numbers standpoint and in terms of how much they’re paid,” Marcec noted.For instance, Equilar’s survey found that:From 2020 to 2021, the share of women in HR executive roles jumped from 59 percent to about 75 percent at the largest U.S. companies by revenue. Just five years ago, in 2017, 42 percent of HR executive roles were held by women. The chief HR officer (CHRO) role is also the only C-suite role in which women hold a majority of positions.In 2021, female CHROs earned a median pay package of $3 million versus $1.6 million for men, Equilar found. “That gap has been growing wider by the year,” Marcec noted. “While pay scales can reflect many different factors, this trend most likely indicates that women are the leaders in the largest HR departments and perhaps hold the roles with the highest proportion of these increasing responsibilities.” Pay for HR PositionsWhile the above findings highlight compensation for C-suite CHROs at the biggest U.S. companies, the pay for most HR professionals is much more down to earth, as shown by projected starting salary ranges for HR positions published in September by staffing firm Robert Half.Information in the firm’s 2022 Salary Guide is based on data from job placements managed by Robert Half teams throughout the U.S., plus additional survey questions fielded from March 26 to April 15, 2021, with responses from more than 2,800 workers across the U.S.While the online guide allows for …
Continue reading …CEO pay 351 times more than the typical worker CEO compensation soars while millions were jobless due to the pandemic-driven recession in 2020. CEO compensation at the top 350 U.S. firms grew 18.9% to $24.2 million on average, according to a new EPI analysis. Meanwhile, typical worker compensation rose 3.9% in 2020. But this wage growth is overstated: high job loss among low-wage workers skewed the average wage higher. […]
Continue reading …By HIROKO TABUCHI — Even with the wage increases the chain recently announced, Walmart workers often do not get enough hours to make ends meet, leaving them in a precarious financial state. Read more about Walmart workers at the source: The New York Times – The New American Job Newsfeed What raises mean for Walmart Workers – From […]
Continue reading …Real average hourly earnings rose 0.6% in November, seasonally adjusted, according to the Bureau of Labor Statistics. Average hourly earnings increased 0.4% and the CPI-U decreased 0.3%. Real average weekly earnings increased 0.9% during the month. Source: Real Earnings [subscribe2]
Continue reading …Far more women than men have jobs paying minimum wage or less, according to U.S. Bureau of Labor Statistics data analyzed by the Pew Research Center. More than half the U.S. workforce is male at 53%. But of those who earning minimum wage or less, 62% are women and 38% are men, according to the study. According […]
Continue reading …Economic Policy Institute Analysis: Time To Raise The U.S. Minimum Wage Analyzing the recent federal minimum wage proposals: $10.10, $9.00, and $9.80– Raising the minimum wage to $10.10 would give working families and the economy a much-needed boost An in-depth analysis of the impact raising the federal minimum to $10.10 would have, detailing the demographic breakdown of […]
Continue reading …The average starting salary for new college graduates earning bachelor’s degrees has increased 5.3% from last year, according to a new report by the National Association of Colleges and Employers (NACE). NACE’s April 2013 Salary Survey — the first look at starting salaries for the Class of 2013 — found that the average starting salary […]
Continue reading …Bummer job prospects and deflating wages await most of the graduating class of 2013, a new report finds. The Great Recession and its aftermath have decimated job prospects and earnings for young workers, a new Economic Policy Institute (EPI) report shows. In The Class of 2013: Young Graduates Still Face Dim Job Prospects, EPI researchers Heidi […]
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