ADP Assists Clients with Newly Enacted Changes to 2013 Payroll and Employment
- Congress Passes the American Taxpayer Relief Act of 2012
- Employee Social Security Tax Rates Return to 6.2% for 2013
- ADP Currently Pays 24 Million Americans or 1 in 6 U.S. Workers
ROSELAND, N.J., Jan. 2, 2013
ROSELAND, N.J., Jan.2, 2013 /PRNewswire/ --ADP ® today reaffirmed that the
company is ready to assist clients in understanding and addressing any tax law
changes impacting payroll and employment tax administration in 2013. For more
than 60 years, ADP has addressed tax law modifications in a timely manner.
During the past several months, ADP has been in constant contact with the U.S.
Internal Revenue Service (IRS) regarding 2013 tax changes and has been
regularly sharing legislative updates through its "Eye on Washington" section
of ADP.com. ADP's "Eye on Washington" is an online resource dedicated to
keeping clients informed of federal regulatory activity that impacts payroll
and employment tax administration.
The House and Senate have passed H.R. 8, the American Taxpayer Relief Act of
2012 (ATRA). President Obama is expected to sign the bill into law within 24
hours. The ATRA includes several changes to tax laws affecting payroll and
employment tax administration in 2013, which will generally be effective upon
The Act effectively maintains the reduced income tax rates adopted in 2001 and
2003 for individuals earning up to $400,000 and families earning less than
$450,000. Income above those levels will be taxed at 39.6%, up from 35%. The
expanded 15% bracket for joint filers, commonly referred to as the marriage
penalty relief, has also been extended. These tax rates have been extended
permanently for wages paid after December 31, 2012.
Employee Social Security tax rates have returned to 6.2% for 2013 wages up to
the taxable wage limit of $113,700. Prior to 2013, the Social Security tax
rate was 4.2%.
In addition, although not affected by the ATRA, the Patient Protection and
Affordable Care Act established a new "Additional Medicare Tax" of 0.9% which
goes into effect in 2013. The new Additional Medicare Tax applies to single
individuals earning over $200,000 and married couples who earn over $250,000
and file jointly. However, employers must withhold the Additional Medicare
Tax from all workers, regardless of marital status, from wages exceeding
$200,000. Thus, the employee Medicare tax rate, normally 1.45%, will rise to
2.35% on earnings over $200,000, regardless of filing status. The employer
Medicare tax rate remains 1.45%. There is no taxable wage limit for Medicare
ADP experts have been closely monitoring the progress of the American Taxpayer
Relief Act of 2012, and assessing its impact to employers. There are many
other provisions that are part of the ATRA that will impact both employers and
employees. ADP maintains a dedicated team of professionals who carefully
monitor all federal and state legislative and regulatory measures affecting
human resource, payroll, tax and benefits administration, and ensure that ADP
systems are updated as relevant laws evolve. For the latest on late-breaking
federal tax law changes, visit the ADP "Eye on Washington" web page located at
Please note: ADP "Eye on Washington" notices are provided as a courtesy to
ADP clients to assist in understanding the impact of certain regulatory
requirements. They should not be construed as tax or legal advice, and
interested parties are encouraged to consult with appropriate legal and/or tax
Automatic Data Processing, Inc. (NASDAQ: ADP), with more than $10 billion in
revenues and approximately 600,000 clients, is one of the world's largest
providers of business outsourcing solutions. Leveraging over 60 years of
experience, ADP offers a wide range ofhuman resource,
payroll,taxandbenefits administration solutionsfrom a single source. ADP's
easy-to-use solutions for employers provide superior value to companies of all
types and sizes. ADP is also a leading provider of integrated computing
solutions toauto, truck, motorcycle, marine, recreational vehicle, and heavy
equipment dealersthroughout the world. For more information about ADP or to
contact a local ADP sales office, reach us at 1.800.225.5237 or visit the
company's Web site atwww.adp.com.
Weber Shandwick for ADP
SOURCE ADP, Inc.
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