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.