For social security, the tax rate is 6.2% each for the employee and employer, unchanged from 2013. The social security wage base limit is $117,000. The Medicare tax rate is 1.45% each for the employee and employer, unchanged from 2013. There is no wage base limit for Medicare tax.
Additional Medicare Tax:
An employer must also withhold additional medicare tax at a rate of 0.9 percent from wages it pays to an employee in excess of $200,000 in a calendar year.
2. Withholding and Deposit Requirements:
The 2014 Publication 15 (Circular E, Employer’s Tax Guide) should be available on the IRS website (irs.gov) by the end of December. This booklet includes the updated 2014 Federal withholding tax tables and gives additional information about deposit rules and other tax information. Oregon payroll updates are available at www.oregon.gov/dor/bus.
Federal payroll tax deposits must be made by telephone or online using the Electronic Tax Payment System (EFTPS). You can enroll online and find out more at www.eftps.gov. Oregon payroll taxes also can be deposited electronically using the internet or telephone. If you are interested, contact our office or find out more at www.oregon.gov/dor/eserv.
3. Federal Employment Taxes:
For 2014, the FUTA tax rate is scheduled to remain at 0.6% (.006) for Oregon employers up to the taxable wage limit of $7,000 per employee, or $42 per employee per year. FUTA tax is deposited quarterly when the cumulative tax liability exceeds the $500 threshold amount.
4. State Employment and Transit Taxes:
The wage limit for Oregon unemployment taxes has increased to $35,000 for 2014. The tax rate depends on your unemployment claim experience. You should have received a rate notice from the Employment Department. The Tri-Met tax rate increased to .007237 for 2014, Lane County has increased to .0070.
5. Worker's Compensation Assessment:
For 2014, the worker’s compensation assessment rate will remain at 3.3 cents per hour worked by each employee. One-half of this amount, or 1.65 cents (.0165) per hour, should be deducted from the employee’s wages. This assessment is reported and paid quarterly with the Oregon Combined Payroll Tax Report.
6. Minimum Wage Requirements:
The Oregon minimum wage has increased to $9.10 per hour for 2014, and will be adjusted annually for inflation by September 30 of each year for the following calendar year
7. Form W-4:
All new employees should fill out a Form W-4 when they start work. Employees who claim to be exempt from income tax withholding must fill out a new Form W-4 each year by February 15. The IRS no longer requires employers to send copies of Forms W-4 claiming more that 10 allowances or certain Forms W-4 claiming exemption from withholding unless requested by the IRS. However, Oregon does still require employers to send copies of Forms W-4 to the Oregon Department of Revenue if the employee claims more than 10 allowances or exemption from withholding.
8. Form I-9:
You must obtain INS Form I-9 (Employment Eligibility Verification) from each new employee, generally within three days of the date of employment. This form is then retained for the longer of three years or for one year after the person’s employment is terminated. Refer to the “Handbook for Employers” for instructions and information about the form.
9. Information Returns (Form 1099):
A reminder that every person engaged in a trade or business is required to file an information return (Form 1099) each calendar year to report certain payments made in the course of such trade or business to another person for rents, interest, fees, commissions, services and other income payments totaling $600 or more (except amounts reported on Form W-2). IRS Package 1099 gives instructions and additional information on filing requirements. Penalties for not timely filing or furnishing Forms 1099 have increased substantially. There are two filing deadlines. The recipient mailing deadline is January 31, the IRS submission deadline is February 28th.
10. New Hire Reporting Form:
All employers are required to file a “New Hire Reporting Form” with the Oregon Department of Justice no later than 20 days after the date the employer hires or rehires an employee.
11. Health Insurance Coverage Notice:
Starting 10/1/13, employers must provide all employees written notice of the health coverage it offers along with an explanation of the new Health Insurance Marketplace coverage options. The DOL has provided two Model Notices (one for employers offering insurance coverage to employees, the other for employers not offering coverage). The model notices are on the DOL website at www.dol.gov. You can find them by searching for “health insurance coverage options.” The notice must be provided by 10/1/13 to employees hired before that date. Employees hired after 9/30/13, must be given the notice at the time of hiring.
This is only a quick recap of payroll reporting requirements. Be sure to give us a call is you have any questions.