Below are federal payroll tax rates and benefits contribution limits for 2022.
Social Security tax
In 2022, the Social Security tax rate is 6.2 percent for employers and employees, unchanged from 2021. The Social Security wage base is $147,000 for employers and employees, increasing from $142,800 in 2021. In 2022 self-employed people must pay 12.4 percent on the first $147,000.
In 2022, the Medicare tax rate for employers and employees is 1.45 percent of all wages, unchanged from 2021. Self-employed people must pay 2.9 percent on all net earnings.
Additional Medicare tax
In 2022, the additional Medicare tax remains unchanged at 0.9 percent. This tax applies to wages and self-employment income over certain thresholds ($200,000 for single filers and $250,000 for joint filers).
In 2022, the maximum contributions to traditional and safe harbor plans are as follows:
- Employee (age 49 or younger) = $20,500, up from $19,500 in 2021.
- Employee catch-up (age 50 or older) = $6,500, unchanged from 2021.
- Employee and employer (age 49 or younger) = $61,000, up from $58,000 in 2021.
- Employee and employer (age 50 or older) = $67,500, up from $64,500 in 2021.
Employees can contribute up to $14,000 to a SIMPLE 401(k) plan, up from $13,500 in 2021.
Health Savings Account (HSA) and High Deductible Health Plan (HDHP) limits
In 2022, the maximum contributions to a health savings account are as follows:
- Employer and employee = $3,650 (self only), $7,300 (family).
- Catch-up amount (age 55 or older) = $1,000.
In 2022, the limits for a high-deductible health plan are as follows:
- Minimum deductibles = $1,400 (self only), $2,800 (family).
- Maximum out-of-pocket amounts = $7,050 (self only), $14,100 (family).
Flexible Spending Account (FSA) limits
In 2022, employees can contribute:
- Up to $2,850 to a health flexible spending account, increasing from $2,750 in 2021.
- Up to $5,000 to a dependent care FSA if filing single or jointly, and up to $2,500 if married but filing separately. The American Rescue Plan temporarily raised the dependent care FSA limits in 2021 to $10,500 and $5,250, respectively. These increases do not apply in 2022.
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) limits
In 2022, employers with a qualified small employer health reimbursement arrangement can reimburse employees for health care expenses as follows:
- $5,450 (self only), up from $5,300 in 2021.
- $11,050 (family), up from $10,700 in 2021.
Commuter benefits limit
In 2022, employees can contribute up to $280 per month for qualified commuter benefits (e.g., mass transit and parking), up from $270 per month in 2021. This limit includes any employer contributions.
Adoption assistance exclusion limit
In 2022, up to $14,890 in employer-sponsored adoption assistance may be excluded from an employee’s gross wages, increasing from $14,440 in 2021.
Remember, these are all federal rates and limits. Be sure to check with us or the necessary agencies for state and local payroll rates.
About this Author
Laura specializes in income tax return preparation, compliance, and research for individuals and businesses. She also is experienced in preparing compiled and reviewed financial statements, individual and S-Corporation taxation, multi-state taxation, and income tax credits including the R&D credit.