The new year ushers in new updates related to payroll and employment. Here’s a brief overview of some of those changes for 2024, broken down into six points for clarity.
1. Social Security wage base increase
FICA, which is comprised of Social Security and Medicare taxes, is at a fixed rate of 7.65% on the employer, as well as an equal rate on the employee. The Social Security portion of the FICA is at 6.2% and is capped to a taxable compensation wage base that adjusts annually. In 2024 the limit will be $168,600, which is up from $160,200 in 2023.
2. Minimum wage increases
The minimum wage can vary depending on the state and locality of your employees. Each year, federal, state, and local minimum wage rates can potentially change.
As of January 2024, the minimum wage in NY and NJ is as follows:
- $16 hourly for NYC, Long Island, and Westchester.
- $15 for the remainder of New York State. Up from $14.20 in 2023
- $15.13 for New Jersey workers. Up from $14.13 in 2023
3. Retirement contribution limits
4. Health savings account limits
- If you offer employees a high deductible healthcare plan (HDHP) with a health savings account (HSA) option, keep in mind that contributions are limited each year. For 2024, employees with self-only coverage can contribute up to $4,150 (an increase of $300 from 2023) for the year.
- If an employee has family coverage, they can contribute up to $8,300 (an increase of $550 from 2023). And if they’re 55+, they can put in an additional $1,000 in catch-up contributions (unchanged from previous years).
5. State unemployment tax rates
State unemployment tax rates may change annually. Many states send employers a new unemployment rate each year via a notice in the mail. NYS sends a letter with updated UI rates annually.
To ensure your state unemployment rates are accurate for the new year, make sure to forward any correspondence you receive from the state to your payroll provider. If you are using payroll software provided by Oberlander & Co, we review your UI rate annually on our NYS online account and update it accordingly.
6. Annual harassment prevention training
Many states, including New York, require all employers, regardless of size, to provide annual sexual harassment prevention training to part-time, full-time, and seasonal employees. In light of this requirement, the Agudath Israel of America created a training module that complies with the law but is also sensitive to our community's standards. You can reach out to them here to learn more about this training module.
❓ Looking to learn more about Form 1099 Requirements? Read more here.
