Bulletin: 2011 Tax Withholding Changes (Posted January 3, 2011)
Paychecks issued for the 12/31/10 pay period (payday 1/7/11) are the first for tax year 2011. Social Security and VDI taxes are withheld again for those employees who reached the maximum withholding in 2010. 2011 benefit deductions also begin with this paycheck.
New federal and state tax withholding rates are in place for this paycheck, and several compulsory payroll tax rates have changed for 2011. The California Short-Term Disability rate has increased from 1.1% to 1.2%. The Social Security tax rate has decreased from 6.2% to 4.2% as the result of the Tax Relief Act of 2010.
The tax rates in effect for 2011 are summarized in the table below. You may update your federal and/or state income tax withholding allowances at any time by clicking the Edit W4 and DE4 Information link on the Employee Information tab in Axess. Click here for step-by-step instructions.
| Tax Deduction Code | Description | Tax Rate |
|---|---|---|
| Fed Withholding | Federal Income Tax | W-4 Rate |
| Fed MED/EE | Medicare | 1.45% |
| Fed OASDI/EE | Social Security | 4.2% on first $106,800 wages earned |
| CA Vol Dis/EE | Short-Term Disability | 1.2% on first $93,316 wages earned |
| CA Withholding | State Income Tax | DE-4 Rate |
Please note: If you claimed exemption from federal and/or state income tax withholding for tax year 2010 and wish to continue for tax year 2011, you must file an updated W-4/DE-4 in Axess by February 15, 2011.
