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Payroll Education Payroll Taxes Payroll Trends

Payroll 2022: What’s Out and In

With inflation in 2021 at its highest in many years, several key payroll-related numbers for 2022 increased and there are a lot of other issues that will be the focus of payroll this year.

PayrollTimes.com’s annual exclusive “out and in” for Payroll 2022 provides a glimpse at what no longer should be considered as the new year starts, and what will come into play as 2022 progresses.

There were some figures, set by tax law, that remain the same and they include the flat tax rate on supplemental wage payments (22%; 37% once $1 million in supplemental wage payments is reached). The general tax rates for individuals remain the same in 2022 as they were for 2021 (10%, 12%, 22%, 24%, 32%, 35%, 37%).

The Social Security payroll tax rate for 2022 stays at 6.2%, and that rate is to be applied up to the new wage base of earnings ($147,000, see below).

The Medicare/Hospital Insurance tax rates remain at 1.45% up to $200,000 in wages and 2.35% (for the employee only) on wage amounts  exceeding $200,000 in 2022.

The $6,500-a-year additional catch-up deferral amount for those individuals over 50 with 401(k)-type accounts also was unchanged.

And it always remains possible that legislative changes could impact these and others in 2022. 

But, beyond that, here are the major things in payroll that are going “out” and coming “in” for 2022:

OUT

IN

Full Return to Office

Hybrid Work-From-Home Arrangements

250 Forms: Form W-2 Electronic Filing Threshold 

100 Forms: Form W-2 Electronic Filing Threshold 

Form 7200: Advance Employee Retention Credit (ERC)

Form 941, Schedule B: Reporting Additional Taxes Because ERC Ended 

$19,500: Tax-Free Deferral Limit for 401(k)-Type Programs

$20,500: Tax-Free Deferral Limit for 401(k)-Type Programs 

State Exceptions for Income Tax Withholding On In-State Telework/Remote Arrangements 

State/Local Withholding Taxes Based on Where Employee Works Remotely

$142,800: Social Security Wage Base

$147,000: Social Security Wage Base

COVID-Related Employment Tax Credits

Taxes On Previously-Eligible Credit Amounts

Social Security Tax Payment Deferrals

Payments of Deferred 2020 Amounts

56 cents-per-mile: Standard Business Mileage Rate

58.5 cents-per-mile: Standard Business Mileage Rate

COVID-Related Mandated Paid Time Off

State-Mandated Paid Time Off

Suspended Withholding on Student Loans

New Student Loan Withholding Orders

COVID-Related Emergency Unemployment 

FUTA Credit Reduction States 

Weekly or Biweekly Payroll Schedule

On-Demand Pay to Digital Wallets

Manual Reconciliations

Automated Reconciliations

Total Defined Contribution Tax-Free Limit

$58,000

Total Defined Contribution Tax-Free Limit

$61,000

As in 2021, more resilience and dedication will be required of payroll professionals as they navigate illnesses, changes in the employment environment, supply-chain challenges and social and political upheaval in 2022. 

With all this, staying focused on the commitment to process accurate and timely pay under continued trying circumstances remains at the top of the to-do lists for payroll professionals in 2022.

PYD

Categories
Payroll Education

The Biggest Payroll Event of the Year

  • For payroll, there is “year-end” and then there is mid-May, when the biggest payroll conference of the year commences.
  • Approved educational recertification credits are available for Certified Payroll Professionals.
  • Thousands stream as well to vendor booths at the American Payroll Association’s premier event.

For payroll professionals in the United States, there is “year-end” that starts each November and ends in mid-February. In this short time period, in addition to continuing to process employee pay, payroll is required to do two more major things at once. 

First, it must consolidate amounts and data for the year that is ending to cross t’s and dot i’s so the employer can provide an accurate accounting on full-year reports. At the same time, any changes for the new year, such as tax calculations, new or expired requirements or revised policies and benefits — all have to be identified and adjustments to systems in place for that first payroll run of the new year.   

It’s a heavy lift, and when it’s over . . . well, many payroll pros will say it’s never really over. But the period between February and May is used to ensure things are working properly in the new year and to clean up any leftover issues from the prior year’s filings. In addition, forward-looking payroll units examine costs and processes, and this often includes initiatives that include introducing new technology or vetting new systems for compatibility.

Then, in mid-May, there is the American Payroll Association’s annual conference. Called a “Congress” by the APA, this is the largest single event of each year for payroll. In normal times, Congress attracts more than 2,000 attendees and well over 100 vendors to, once again, the biggest payroll-focused exhibition of the year anywhere. 

Usually, there are more than 100 separate workshops and several general sessions.

In the U.S. Those certified by the APA as payroll professionals (CPP) or those who have a Fundamental Payroll Certification (FPC) get many, many educational recertification credits for attending these sessions, and the credits help them to keep their designations. (See a separate Payroll Times story on APA’s certification program for more detail.)

In 2021, Congress XStream, as it was titled, went virtual for the second year in a row due to the pandemic. But the several thousand registrants still had access to some of the best minds in payroll through numerous online educational workshops and key announcements during general sessions. And these workshop sessions remain available on-demand through most of the summer to registrants.

Then there is the virtual exhibit hall. Again dozens of payroll-related vendors and service providers had a presence and were allowed to do demonstrations and talk to potential clients and prospects.  

There are other payroll-focused events during the year, such as the APA Capital Summit, normally held in Washington, D.C. during the spring, and the Payroll Leaders Conference coming up in September (this one will be an in-person event in Las Vegas). 

But APA’s Congress is the granddaddy of them all, and I look forward to going in-person next year! 

PYD