You May See These Tax Changes on Your Jan. 3 Paycheck

The following tax rates for 2025 will be effective on your Jan. 3 paycheck. This means you may see a difference in your take home pay.

1. Social Security (OASDI): The employer/employee tax rates will continue at 6.2%. The wage base limit will be $176,100, an increase of $7,500 from $168,600 in 2024. The maximum social security tax will be $10,918.20, an increase of $465.00 from $10,453.20 in 2024.

2. Medicare: The employer/employee tax rates will continue at 1.45%. An additional 0.9% will be withheld from employees (not employers) on all wages in excess of $200,000 per year. There is no wage base limit or maximum tax.

3. Federal/State Income Taxes: Federal tax tables for 2025 are available in IRS Publication 15-T and State tax tables for 2025 are available here.

4. SDI: The employee withholding rate will increase from 1.1% in 2024 to 1.2% for 2025. There is no wage base limit or maximum tax.

5. Qualified Transportation Fringes: Amounts are excluded from gross income for employer-provided qualified transportation fringe benefits (transportation in a commuter highway vehicle and any transit pass).

6. Federal Standard Milage Rates (Business Reimbursement): The standard mileage rate will increase from 67 cents to 70 cents per mile as of Jan. 1.

7. Federal Standard Milage Rate (Moving Reimbursement): The standard mileage rate will remain 21.0 cents per mile as of January 1, 2025.

8. Social Security Number on employee’s copies of W-2/W-2c will be masked on all forms issued, including the prior year Form W-2/W-2c available in PeopleSoft Employee Self-Service. The format will be shown as XXX-XX-1234.

Please note that the above rates and amounts are subject to changes by new federal and state legislation.

If you have any questions, please visit Central Payroll Administration on InSite.