On Tuesday, Congress reached a compromise on the Bush-era tax cuts that address some, but not all of our concerns. Unemployment benefits have been extended for one year, prevention of a scheduled 27% Medicare cut has also been averted and changes to Social Security were availed. Your efforts in contacting your representatives played a vital role in this success.
One significant fall-out from the compromise bill is the failure to extend the payroll tax cut, which results in a permanent hike in payroll taxes for everyone beginning January 1, 2013. As of this year, everyone will now pay a 2% higher payroll tax. The employee share of Social Security withholding has increased from 4.2% to 6.2%. While this will result in less take-home pay, the additional amount collected will support the system of which we are all a part.
As a result of the discontinuation of that tax suspension, United will complete their programming of the new tax rate in their computers prior to issuing the January 16 paycheck. Payroll will also make an appropriate tax adjustment on our January 16 check for all employees who were issued any payroll checks since January 1, 2013. As with all financial matters with United payroll, we encourage you to carefully scrutinize your pay records and deductions to verify they are accurate.