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Payroll Tax Changes for 2018

Sue Humphrey

December 29, 2017

As we approach the end of the year we are reminded of the changes that will affect payroll tax withholding and reporting for the next year.  This year is no exception, so here are the changes that we are seeing for 2018:

1.  Social Security Wage Limit for 2018 will be $ 128,700.  This is an increase over the $127,200 cap in 2017.  The maximum amount of Social Security tax (6.2%) a taxpayer could pay will therefore increase to $7,979.40 in 2018. 

2.  The State of Oregon Employment Department has established the 2018 Unemployment Insurance (UI) Rates for 2018.  All established employers having Oregon wages subject to this tax should be receiving an annual statement in late November 2017 showing the rate for 2018.  The tax rate is calculated based on each employer’s experience based on the benefit charges and the taxable payroll for the prior three years ending June 30, 2017.  These rates are unique per employer so please watch for the notice.  

3.  In line with the above, the State of Oregon Employment Department has established that the 2018 annual taxable wage base per employee will be $39,300.  This wage base applies to all employee’s subject to the UI tax rate.   The 2017 wage base was $38,400.

4.  The Workers Benefit Fund assessment (cents per hour) will remain at 2.8 cents per hour or partial hour worked by each individual that an employer must cover with worker’s compensation coverage.  Employers must pay at least half the amount (1.4 cents per hour) and deduct no more than half (1.4 cents per hour) from the worker’s wage.  There is no change for 2018.  

5.  There will most likely be new tax tables (Circular E, also known as Publication 15, for Federal) and Oregon Withholding tables for 2018.  They are not as yet available, but prior to preparing any payroll in 2018 please watch for these.  An informative website to use for the Federal would be irs.gov and Oregon will have theirs on their website as well – Oregon.gov.  New tables will also be available on software so be sure to do an update to the program that you are using for payroll processing prior to preparing any payroll to be dated in 2018.


Of course, we at SGA are here to help, so please give us a call if you need assistance.



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