With the new tax year come many paycheck adjustments. Here are some of the changes employees might expect starting this month:
Wages:
- Employees earning less than the minimum wage rates will notice an increase, effective January 1.
Benefit Deductions:
- Employees may have different health deduction amounts than in the prior year (including for medical, Health Savings Account (HSA), Medical or Limited Purpose Flexible Spending Arrangement (FSA) and/or Dependent Care Assistance Program (DCAP) plans), reflecting premium price differences or changes made during Open Enrollment.
- Employees who reached their retirement savings limit earlier in 2023 will have retirement deductions restart in January 2024.
State and Federal Taxes:
- Washington State’s Paid Family and Medical Leave Program premium rates will be decreasing from 0.8% to 0.74% of the employee’s gross wages, up to $168,600 of taxable income.
- Maximum earnings subject to Social Security tax increases to $168,600 for 2024. Employees who reached the Social Security cap in 2023 will have Social Security deductions resume in January 2024.
- Employees who earn more than $200,000 may have a reduction in Medicare withholding in the early part of 2024; once annual wages exceed $200,000 for the year, a 0.9% Additional Medicare Tax will be withheld from wages and will be withheld each pay period until the end of the calendar year.