Payroll tax cut expiration means less money out of your paycheck

KNOXVILLE, Tenn. (WVLT)-- Lawmakers avoided the fiscal cliff, but Uncle Sam will be taking more money out of your weekly pay check.

The payroll tax, which funds Social Security, reverted back to its old rate Tuesday going from 4.2% to 6.2%.

Congress lowered the amount you pay two years ago to stimulate the economy, but leaders didn't extend the tax cut this time around.

"I'm self employed, so for me, the payroll tax actually effects my self employement tax, and it hurts," Brian Sterutz said.

Here's what the percentage increase means in real numbers:

If you make $20,000 a year, you'll pay $400 more in taxes in 2013.

If you make $30,000, you'll pay $600.

And if you make $50,000, you're going to shell out $1,000 more.

"I think the people that it will hurt most are those people who are trying to hold on to two jobs at one time," Gail Wood said.




 
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