As a business owner, it can be difficult to keep straight all of the tax and regulatory changes which effect your business each year. Payroll Service Solutions has made it as easy as possible by compiling a list of changes for business owners to reference. In the case which one of these changes effect your business, we strongly recommend contacting your tax attorney or tax professional to provide you with the insight that applies to your business’s unique needs.
Important Tax Changes – Federal Tax Rates
- The Social Security Administration (SSA) has announced the 2025 wage base will be $176,100 (up $7,500 from $168,600 in 2024).
- The 7.65% combined rate for Social Security and Medicare remains unchanged for 2025. The Social Security portion of the Old-Age, Survivors and Disability Insurance (OASDI) is 6.2% on earnings up to the applicable taxable maximum amount. The Medicare portion is 1.45% of all earnings.
- You can find the SSA Fact Sheet regarding the 2025 Social Security changes at https://www.ssa.gov/cola
REMINDER – Federal and State Unemployment taxes start again in 2025 until the limits are reached for each employee.
Please note that the information provided here is for your convenience and may be subject to change. It is important to clarify that this information does not constitute legal or tax guidance. If you have any questions or concerns that go beyond the realm of our payroll services, we highly recommend consulting a qualified CPA, tax attorney or tax advisor. Thank you for choosing PSS to handle your payroll needs.
Read more about federal tax rate changes.
State Unemployment Wage Bases
Each state has a different wage base for state unemployment insurance. For each state, rates may differ and changes may occur at different times. Utilize this list as a resource for your state(s) and contact your tax professional for any questions.
Read more about state unemployment wage base changes.
State Disability Insurance & Paid Family Leave Rates
Each state has a different wage base for disability insurance and paid family leave rates. For each state, rates may differ and changes may occur at different times. Utilize this list as a resource for your state(s) and contact your tax professional for any questions.
Read more about state unemployment wage base changes.
Important Tax Changes – Retirement
- 401k Deferral Limit increases from $23,000 to $23,500
- If you are 50-59 years old the limit increases to $31,000
- If you are 60-63, the new SECURE Act 2.0 allows the limit to be increased to $34,750
- Simple IRA Limit increases from $16,000 to $16,500
- If you are 50-59 years old the limit increases to $20,000
- If you are 60-63, the new SECURE Act 2.0 allows the limit to be increased to $21,750
- Traditional and Roth IRA limits remain unchanged at $7,000
- If you are 50-59 years old the limit remains unchanged at $8,000
Read more about retirement tax changes.
Mileage Rate Changes for 2025
Mileage rates for 2025 have increased to $0.70 up from $0.67 in 2024.