What the payroll tax hike means for your paycheck - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

What the payroll tax hike means for your paycheck

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SAVANNAH, GA (WTOC) -

Lawmakers signed a law to avert the fiscal cliff, but many Americans can expect to see money missing from their next paychecks.

Congress decided to allow a payroll tax holiday to expire. Effective immediately, the payroll tax rate goes up to 6.2 percent from 4.2 percent. Middle-class Americans might feel the heaviest burden, as payroll taxes are capped on folks making more than $113,700 a year.

Here's a breakdown of how much more you'll pay per bi-weekly paycheck, based on annual salary:

  • $20,000 - 4.2 rate: $840 a year, 6.2 rate: $1,240 - $16 more 
  • $30,000 - 4.2 rate: $1,260 a year, 6.2 rate: $1,860 - $25 more 
  • $40,000 - 4.2 rate: $1,680 a year, 6.2 rate: $2,480 - $33 more 
  • $50,000 - 4.2 rate: $2,100 a year, 6.2 rate: $3,100 - $42 more 
  • $60,000 - 4.2 rate: $2,520 a year, 6.2 rate: $3,720 - $50 more 
  • $70,000 - 4.2 rate: $2,940 a year, 6.2 rate: $4340 -> $58 more

Reggie Crawford, of Wells Fargo, offered the following advice on how to make up for the loss in income.

"The main thing is just do something. You see that more money is being taken out of your checks and so forth, the last thing you want to do is let everything pass by. Definitely consider combining those credit cards into one to save a little interest, consider refinancing your auto loans, your mortgage."

Here are some web sites to help you track spending:

Here are some apps:

  • iAllowance
  • Mint
  • iSpending
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