2016 FICA & FUTA LIMIT & PERCENTAGE RATES

*** 2016 FICA, MEDICARE, FUTA amounts are unchanged from 2015 ***

Please note: Some of the comments below regarding setting/resetting amounts for W2 & year-end reports would only apply to if there had been a change but are left here for consistency with prior years. It is still a good practice to double check those values.

Before running a payroll for a new calendar year (2016), the MTD, QTD and YTD (from 2015) on the employees’ records must be cleared out. Running the Clear YTD, QTD, MTD Emp/Recurring program does this. Go to:

Payroll (Module 1)
- System Management Functions (Task 32)
  - Clear YTD, QTD, MTD Emp/Recurring (Sub-task 3)

Clearing these fields will not interfere with the running of W-2s for 2015, since the information for the W-2s come from the Payroll History. Note: If these fields are not cleared, the current year’s wages (2016) that print on the check stub will also include the wages from the prior year (2015).

Also note that the FICA Maximum for 2016 has NOT changed:
- 2016 $118,500.00
- 2015 $118,500.00
- See below the change needed in field 5. Unless you have an employee who is going to exceed the $118,500.00 before the 2015 W2’s are printed, then this change can be made after your W2’s are printed.
The FICA employee tax rate for social security is still 6.2% as it was in 2015.
The FICA employer tax rate for social security stayed the same as 2015 at 6.2%.

FICA fields are found in:

Payroll (Module 1)
- System Management Functions (Task 32)
  - Update P/R Execution Parameters (Sub-task 4)
    - Field 5: FICA Maximum: 118,500.00
    - Field 6: FICA employee %: 6.20
    - Field 7: FICA employer %: 6.20]

ADDITIONAL NOTE: Field 5: FICA Maximum needs to be the 2015 amount of $118,500.00 when the 2015 W2’s are printed and when the payroll reports are printed for the 2015 4^th quarter.

Verify the 2016 FUTA % & maximum:

Payroll (Module 1)
- System Management Functions (Task 32)
  - Update P/R Execution Parameters (Sub-task 4)
    - Field 20 Fed unemp max: 7000.00
    - Field 21 Fed unemp pct: 0.60 (which is net of 6% - 5.4% max credit. You must verify this is applicable to your particular state & situation)

STATE:

If your state has an unemployment maximum and an unemployment % you may need to update field 22 & 23. Verify with your state website or your accountant.