Payroll Tax Cut Extension for 2012

President Barack Obama signed the payroll tax cut extension into law Wednesday, which was passed by Congress overwhelmingly last Friday.  The measure extends the two percentage-point reduction in the tax that funds Social Security for the remainder of 2012.

With this tax cut, The employee Social Security tax rate is reduced to 4.2%, while the employer Social Security tax rate remains unchanged, at 6.2%.

If you’re running your own payroll for your small business, make sure you adjust the tax rate accordingly.