Who’s behind my net pay being different?

The reason for your net pay changes are NOT because of some payroll software screw up, but instead The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 tax law changes.  You thought it was due to something simple!  Actually, you are correct!  There are two reasons within the bill that make your net pay different for all of 2011.  Those changes are:

  1. The reduction of 2% on the employee’s portion of social security withholdings, and
  2. Changes to the withholding tables (got rid of the economic stimulus tables therefore causing you to have more withheld)

Overall, you should see higher net pay the next time you look at your paystub.  This will remain the case for all of 2011.

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Pursuant to applicable U.S. Treasury Regulations, we must advise you that any tax advice included in this communication is not intended or written to be used, and cannot be used, by a recipient for avoiding penalties that may be imposed on the recipient by any governmental taxing authority or agency.

Written by:

- who has written 7 posts on Todd Jackson Accountabilities, LLC.

is the owner of Todd Jackson Accountabilities, LLC. He is a CPA and entrepreneur providing expert financial advice to fast growth companies and individuals.

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