2023 Payroll Update
Updated: Nov 22, 2022
Please be advised that effective January 1, 2023 there will be changes to Payroll Taxes and employer/employee withholding.
The 2023 Social Security Tax wage base will increase to $160,200.
The 2023 Social Security Tax Rate will remain 6.2% for employers and employees. ALL wages are subject to Medicare Tax. The Medicare Tax Rate will remain at 1.45% each for employers and employees. Employees with earnings exceeding $200,000 will have an additional 0.9% Medicare Tax withheld that is not matched by the employer.
The New York MTA payroll tax has been eliminated for employers who have payroll under $312,500 in any calendar quarter.
Please be reminded that you must obtain forms W-4 and I-9 for all NEW employees. In addition, all New York State employers must send a copy of the W-4 to New York State for all new employees – within 20 days of the hiring date. Under the Wage Theft Prevention Act in New York employers are required to give new employees as well as employees with any rate of pay change a “Notice and Acknowledgement of Pay Rate and Payday”. This must be signed and dated by the employee. The employer is to keep the original for six years and give a copy to the employee. The WTPA also requires employers give employees a wage statement or pay stub each payday. Feel free to contact us if you need further information regarding the WTPA. NYS will impose severe penalties for not adhering to the WTPA requirements.
Paid-Sick leave in Westchester County: All employers who employ 5 or more employees must provide at least 1 hour of paid time for every 30 hrs worked with a maximum of 40 hrs of leave per year.
Paid-Sick leave in NJ: All employers must provide 1 hr of paid time for every 30 hrs worked with a maximum of 40 hrs per year.
Form 1099-NEC reporting non-employee compensation in box 1 and form 1099-Misc as well as forms W-2 and W-3 must be filed with the government by January 31, 2023 for paper and electronically filing. All other types of 1099’s are due February 28, 2023 if paper filing and March 31, 2023 for electronic filing.
Please be further reminded that most states have strict requirements for Workers’ Compensation and Disability. Please be sure that you have the proper coverage. Effective January 1, 2023 the NY Paid Family Leave is decreased to 0.455% with a maximum annual contribution of $399.43.
As of 1/1/2021 CT enacted the Paid Family and Medical Leave Act. Employers are required to register with CT online. The webpage is https://ctpaidleave.org/s/prepare-for-registration?language=en_US
Employers are required to withhold from employees beginning 1/1/2021 with earned wages of at least $2,325 a quarter and are currently employed and have been employed within the last 12 weeks at the rate of 0.5% from their payroll with an annual cap of wages being $160,200. Self-employed individuals and sole proprietorships may also apply to participate. Employers will be required to make quarterly payments to the fund by 3/31, 6/30, 9/30 and 12/31. Employers using a third-party administrator for payroll should contact them to affirm you are in compliance. All of the specifics will be spelled out for you on the CT web site.
Finally, the Department of Labor requires that payroll records for all employees containing wages, hours etc. be maintained on premises. Please feel free to check with us to insure that your records are in compliance with government standards.
Also note that the Federal minimum wage is $7.25 per hour as of 1/1/23. The Connecticut minimum wage increases to $15.00 per hour as of 6/1/23 and New Jersey will increase to $14.13 per hour for 1/1/23. New York has several rates effective 12/31/22. In NYC the rate is $15.00. For Nassau, Suffolk & Westchester counties the rate is $15.00, for the rest of the state the rate is $14.20. Please be sure to adhere to correct overtime rates for all employees.