Social Security Updates
The Social Security Administration has announced that the wage base for computing the Social Security tax (OASDI) in 2012 will increase to $110,100 from $106,800, the wage base for 2009 through 2011. The $3,300 increase, which is about 3%, is due to an increase in average total wages. Also, monthly Social Security and Supplemental Security Income (SSI) benefits will increase 3.6 percent in 2012 due to a cost-of-living adjustment (COLA).
2011 Social Security Wage Base
Social Security's Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit generally increases with increases in the national average wage index. We call this annual limit the contribution and benefit base, or taxable maximum. For earnings in 2011, this base is $106,800.
For Medicare's Hospital Insurance (HI) program, the taxable maximum was the same as that for the OASDI program for 1966-1990. Separate HI taxable maximums of $125,000, $130,200, and $135,000 were applicable in 1991-93, respectively. After 1993, there has been no limitation on HI-taxable earnings.
An employee who pays contributions on earnings in excess of the contribution and benefit base (because of employment with two or more employers) is eligible for a refund of the excess employee contributions.
For wages paid in 2011, employees pay 4.2 percent and employers pay 6.2 percent in OASDI taxes. Thus, an individual with wages equal to or larger than $106,800 would contribute $4,485.60 to the OASDI program in 2011, and his or her employer would contribute $6,621.60. Self-employed workers pay 10.4 percent in OASDI taxes on income in 2011. By law, the OASI and DI trust funds will receive taxes as if the tax rates were 6.2 percent for employees and employers, each, and 12.4 percent for self-employed workers. The reduction in 2011 tax revenue due to lower tax rates will be made up by transfers from the general fund of the Treasury to the trust funds.
2011 Mileage Rates
Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 51 cents per mile for business miles driven
- 19 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
2011 Ohio Minimum Wage
The 2011 Ohio Minimum Wage is as follows:
- $7.40 per hour for non-tipped employees
- $3.70 per hour for tipped employees (plus tips)
The Ohio Minimum Wage is $7.25 per hour (tied to the federal minimum wage) for:
- *Those employees whose employers gross $271,000 or less per year
- *14 & 15 year olds