Payroll Tax Changes for 2013
As we begin the new year, we want to update you on several tax rate changes previously communicated in December 2012 that will impact your upcoming 2013 pay periods.
OASDI (Social Security) and Medicare Taxes
The change that most employees will notice on their paychecks is an increase in the OASDI tax. Changes in OASDI and Medicare taxes have been implemented for January pay periods.
Your portion of OASDI (OASDI/EE) taxes increased from 4.2% to a rate of 6.2% on earnings paid on or after January 1, 2013. The maximum earnings subject to OASDI taxes will be capped at $113,700 in 2013. In 2012, the cap was $110,100.
There will be two tiers of Medicare taxes starting January 1, 2013. For wages of $200,000 and below, the Medicare tax rate will remain at 1.45%, same as in 2012. An additional 0.9% rate of Medicare tax on wages in excess of $200,000 was enacted as part of the Affordable Care Act. There is no cap on the earnings subject to Medicare tax or the additional Medicare tax.
For hourly employees, the biweekly payroll period ending 12/22/2012 paid on 01/02/2013 was the first payroll period that reflected the changes. For monthly paid employees the period ending on 01/31/2013 will reflect the changes.
Federal Income Withholding Rates
Updated federal income tax withholding rates for 2013 were released by the IRS on January 3, 2013. The new income tax rates retain the rates in effect during 2012 for all wage earners, except the highest earners. For individuals with taxable incomes of more than $400,000, and $450,000 for married couples, the income tax rates increased to 39.6%. The highest income tax rate during 2012 was 35%.
Due to the late release of the updated income tax withholding rates, these changes will be reflected in February 2013 for those employees affected by the changes. For hourly employees, the biweekly payroll period ending 02/16/2013 to be paid on 02/27/2013 will be the first payroll period to reflect the changes. For monthly paid employees, the period ending on 02/28/2013 will reflect the changes.
Federal income withholding rates for supplemental wages (i.e., wage payments to an employee that are not regular wages) will remain at 25%, the same rate in effect during 2012. An example of supplemental wages includes incentives paid to physicians under the University Physicians Practice Plan.
Other Important Information
If you are paid biweekly, there will be 27 biweekly paychecks during 2013. In most years, there are 26 biweekly paychecks. Please consult with your tax professional for how the extra biweekly paycheck may affect your tax planning for the year.
If you have questions, please contact (UMSL Payroll) Errol Benson, ext. 5803, Karen Cedeck, ext. 5238 or PeopleSoft HR Support listed below.
Phone: (573) 884-6996 or Toll Free: 1-855-524-0002
Hours: Monday-Friday 8:30am-4:30pm
Employee Discount Portal for UMSL Employees
On March 28, 2012, the University of Missouri-St. Louis launched an employee discount portal with exclusive discounts for both national and local retailers available to all employees in conjuction with one of the nation's leading providers of such services: PerkSpot. Disclaimer and program information is available on the benefits page of the Current Employees section of the Human Resources website.
Tobacco-Free Policy for UMSL
At the University Assembly meeting on November 8, 2011, the following tobacco-free policy was approved for the UMSL campus.
Policy: Effective January 1, 2012, the University of Missouri-St. Louis will become tobacco-free on all campus property, both indoors and outdoors. The term “tobacco-free” means that the smoking or other use of any tobacco or tobacco-type product, including, but not limited to, cigarettes, cigars, smokeless tobacco, and pipes is prohibited. This does not include e-cigarettes. Campus property includes all owned or leased buildings, parking garages and parking lots; owned or leased vehicles; and owned or leased outdoor grounds and sidewalks. This policy applies to faculty, staff, students, contractor and consultant employees, performers, visitors and the general public.
Exceptions: The policy does not apply to individuals in privately owned or privately leased vehicles with the windows and sunroofs or similar devices in the fully closed position.
Another exception to the policy applies to individuals participating in academic research on tobacco-related topics or other such accommodations approved by the Campus Institutional Review Board, provided that the activity is conducted in an appropriately ventilated area.
The Chancellor may approve other exceptions to the policy after considering the intent of the policy as balanced against specific facts and circumstances set forth in a written request from a senior level administrator.
Smoking Cessation: University Health, Wellness and Counseling Services provides tobacco-related cessation programs for all students, faculty, and staff. Many of these programs are offered at no or minimal cost to the participants.
Respect & Responsibility: The success of this policy relies on the thoughtfulness, consideration, and cooperation of smokers and nonsmokers for its success. All members of the University community share the responsibility of adhering to the nonsmoking policy. They should also bring it to the attention of visitors. Any complaints should be brought to the attention of the appropriate University authorities. If conflicts or problems should arise, environmental health and safety considerations shall prevail.
Change in Hiring Freeze Process
Chancellor George has approved a change in the hiring freeze process for staff and students, effective immediately (April 19, 2011). The hiring freeze form will no longer be used. All that is required for staff is a Request-to-Fill form approved by the appropriate vice chancellor or by the chancellor.
Change in Posting Dates
Beginning with the August 6 , 2010 posting, positions will be posted to our website beginning on Friday morning and have application deadlines on Fridays.
This change will not alter any of the current posting procedures. To post a position, the position must first be approved for exception from the hiring freeze. Then the completed and signed Request to Fill form must be received in Human Resources by noon on Wednesday for the position to be posted that Friday.
Effective June 13, 2010, the U.S. Citizenship and Immigration Services published a redesign of the E-Verify website. This means that anyone who uses E-Verify must take a 10-20 minute refresher tutorial. You can access this tutorial by logging onto the website here.
Assistant Director of HR, Administration
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