Important Payroll Changes in 2011

Written by: David Kravetz, Payroll Administration Manager

As the end of the year approaches, it is important to make sure businesses have everything in order in regards to payroll. Understanding new payroll updates for the upcoming year is the first step to ensuring your 2011 is off to a right start.

In 2011, two important changes should be noted:

• California State Disability Insurance (SDI) withholding rate is increasing from 1.1% to 1.2%. It might be a small change, but believe me; your employees will notice the increased amount that is coming out of their paycheck.
• W5, the earned income credit, will no longer be in existence. The government decided that this was utilized enough, so the employees that do use this can just adjust their W4.

One other thing that should be done is to send a year end letter to your employees. Let them know of the payroll changes for the upcoming year, have them verify their address, and let them know when their W2 will be mailed out. Remember, the deadline to send out the W2 is January 31.

The MMC payroll team attends year end seminars to relay new changes to our clients. A year end letter is sent to the employees and most importantly we handle the responsibility for getting the W2’s out on time so the employer can focus on what really matters - their business. From the MMC payroll team, we wish you a Happy Holiday Season.

MMC HR E-Newsletter Archive

MMC Human Resources Tips