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2018 Employer Tax Guide

SUBJECT: PAYROLL GUIDE FOR THE YEAR 2018

(CHANGES ARE IN RED)


EMPLOYEE DEDUCTIONS:

  • SOCIAL SECURITY – 6.2%

    The maximum amount of taxable earnings subject to the Social Security tax is $128,400.00.

    The tax rate will be 6.2% for employers and employees.

  • MEDICARE – 1.45% on all earnings. Also, as of January 2013, individuals with earned income more than $200,000 ($250,000 for married couples filing jointly) pay an additional 0.9 % in Medicare taxes.
  • FEDERAL WITHHOLDING – Refer to Publication 15 Tax Tables (Circular E) Employer’s Tax Guide For 2018 posted on the IRS website at https://www.irs.gov/ under the heading of "Forms and Pubs".
  • PENNSYLVANIA INCOME TAX WITHHELD – 3.07%
  • PENNSYLVANIA UNEMPLOYMENT COMPENSATION TAX

    .06% or .0006 tax on employee wages, or .60 cents for each $1,000 earned. Increase in Wage base from $9,750 to $10,000.

  • LOCAL TAX RATE – Hermitage 2.25%; Sharon 2.25%; Farrell (R) 2.5%, Farrell (N/R) 1.8%; West Middlesex 1.0%; Sharpsville 1.0%; South Pymatuning Twp. 1.0%; Greenville Boro (R) 1%, Greenville Boro (N/R) 1%; New Castle (R) 2.1%, New Castle (N/R) 2.0%; Grove City Boro 1%. Website for Local Tax Rates: https://munstats.pa.gov/public/findmunicipality.aspx (R) = resident (N/R) = non-resident (rates are subject to change)
  • LOCAL SERVICES TAX or LST TAX – Please refer to the following website for the amount of LST tax deduction for your municipality: https://munstats.pa.gov/public/findmunicipality.aspx If an employee is exempt from LST tax, he or she must complete form “Local Services Tax – Exemption Certificate, Application For Exemption From Local Services Tax”.

  • FORMS THAT ARE REQUIRED BY LAW TO BE FILLED OUT BY EACH EMPLOYEE AND/OR EMPLOYER:


  • FORM W-4 – Remind all employees to submit a new Form W-4 if their withholding allowances or filing status has changed. (keep for your records)
  • FORM I-9 - (Employment Eligibility Verification) You must verify that each new employee is legally eligible to work in the United States. (keep for your records)
  • NEW HIRE REPORTING FORM – All Pennsylvania & Ohio Employers are required to report all newly hired employees. (fax/mail/web address: PA at www.panewhires.com or OH at www.oh-newhire.com)
  • RESIDENCY CERTIFICATION FORM – Local Earned Income Tax Withholding. (keep for your records) This form is available at this website: www.hab-inc.com/forms