Payroll 2022: What’s Out and In

What is new for Payroll in 2022 and what is out. We have summarized the biggest Payroll news and updates for you.
payroll-2021-2022-changes

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

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