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Employer/Employee Taxes

Federal Tax Information- Employee Paid

Federal tax varies from 0% to 35% depending on income level and number of exemptions. The more exemptions a person claims the higher the thresholds for tax rates become.

Example - Weekly payroll

Single employee claiming zero exemptions would need to make between $653.00 and $1533.00 to be taxed at 25% rate.

Single employee claiming one exemption would need to make between $720.31 and $1600.31 be taxed at the 25% rate.

Massachusetts Income Tax Information - Employee Paid

5.3% is the standard rate.

Massachusetts- Unemployment Tax Information - Employer Paid

New Employer Rate 2.53%

Minimum Rate 1.12%

Maximum Rate 10.96%

on the first $14,000 of an employee's wages

Unless you are a new employer, your contribution rate is determined by your experience rating account balance. The ending balance of your account is updated each October as DUA takes into account the following:

  • Your account balance based on the immediately preceding twelve months of activity
  • Plus the contributions you paid
  • Less the benefits charged to your account
  • Less the statewide "solvency assessment" charged to your account.

These rates are set by the State. Generally Rate notices will be mailed early in January to all private contributory Massachusetts employers.

MA- Healthcare - Employer Paid

A .12% (.0012) tax is placed on the first $14,000 of an employee's wages.

Massachusetts employers covered by the Unemployment Insurance Law are also liable for a health insurance contribution. The funds from this contribution provide health insurance for eligible unemployment insurance claimants. This health insurance is called the Medical Security Plan, which is administered by DUA.

Health insurance contributions receipts are deposited in the Medical Security Trust Fund. They are not credited to employers' UI accounts and are completely independent of the unemployment contribution trust fund.

MA- Workforce Development - Employer Paid

A .06% (.0006) tax is placed on the first $14,000 of an employee's wages. This payment, which is in addition to the Unemployment Insurance contribution payment, is deposited in the Workforce Training Fund which is used to award grants to companies to provide workforce training and education programs for incumbent workers.

Workforce Training Fund contribution payments are not added to an employer's account balance for experience rating purposes, nor can they be deferred.

Federal Unemployment Tax information - Employer Paid

Employers who either employ one or more individuals in each of twenty different weeks in a calendar year or pay wages of $1,500 or more during any calendar quarter in the current or preceding calendar year pay 6.2%. Employers are entitled to a credit against their FUTA liability for contributions to state funds. The credit is limited to 90% of a deemed 6% federal tax rate (5.4%). The net effective FUTA rate for most employers is therefore 0.8% on the first $7,000 of wages paid to each employee in a calendar year.

Medicare Tax information - Paid 50/50 Employee/Employer

1.45% or .0145 of all wages paid- the wages can be reduced by employees pretax medical and/or dental benefits, plus and pretax voluntary benefits that might be offered and taken by the employee.

OASDI Tax Information - Paid 50/50 Employee/Employer

6.2% or .062 of all wages paid- the wages can be reduced by employees pretax medical and/or dental benefits, plus and pretax voluntary benefits that might be offered and taken by the employee. OASDI is only paid on the first $102,000 of the employees pay.

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