2020 Numbers to Know

Each year, the IRS updates numbers based on inflation that affect payroll, retirement plans, and employee benefits. Here are some key figures for 2020:

Payroll

• Social Security Taxable Wage Base – $137,700
• Social Security Withholding Percentage – 6.2%
• Medicare Taxable Wage Base – unlimited
• Medicare Withholding Percentage up to earnings of $200,000 – 1.45%
• Medicare Withholding Percentage for earnings above $200,000 – 2.35%

Retirement Plans

• Maximum Salary Deferral for 401(k) & 403(b) Plans – $19,500
• 401(k) Catch Up Contribution for Employees age 50+ – $6,500
• Maximum Salary Deferral for SIMPLE Plans – $13,500
• Catch Up Contribution for SIMPLE Plans age 50+ – $3,000
• Maximum Contribution from all Sources (Employee and Employer) for Profit Sharing and 401(k) Plans – Lesser of 100% of employee’s compensation or $57,000
• Maximum Compensation Considered for Qualified Retirement Plans – $285,000
• Highly Compensated Employee Threshold – $130,000
• IRA Contribution Limit – $6,000
• IRA Catch Up for Individuals age 50+ – $1,000

Employee Benefits

• Medical Reimbursement Flexible Spending Account – $2,750
• Dependent Care Flexible Spending Account – $5,000
• Health Savings Account Contributions: Self-Only – $3,550
• Health Savings Account Contributions: Family – $7,100

For all these numbers in a nifty one page flyer, click here.