Mid-Year Payroll Changes: Effective July 1, 2017

There are a few payroll changes in New York City, New York State, and Philadelphia that took effect on July 1. The overview of those items is as follows:

New York City: Withholding Tax Rate Change

The withholding tax rates have changed for employees earning $500,000 or less per year. This is a change, although not significant. If your company prepares payroll in-house, it is important to make sure the tables are updated.

New York State: Paid Family Leave Change

A Paid Family Leave program deduction took effect on July 1, 2017, and employees may begin deducting at any time between now and when the Paid Family Leave program begins on January 1, 2018. On that date, the deduction will be mandated for all full-time and part-time employees in the private sector.

This deduction is set at .126% of gross wages up to a weekly wage of $1,305.92. Public employees can opt in, and seasonal employees – working less than 175 days a year – can opt out since they are not eligible for benefits.

The benefit payments under the Paid Family Leave program will be paid by insurance. The employer should contact their New York Disability Benefit insurance carrier as their policy will need to have Paid Family Leave coverage added. This additional coverage will be paid by the deduction from the employee’s wages.

Philadelphia, PA: Wage Rate Change

The Philadelphia wage tax rates decreased effective July 1, 2017. This wage tax is imposed on all residents of Philadelphia and non-residents who work in Philadelphia. The rates changed as follows:

  • Residents of Philadelphia: Rates changed from 3.9004% to 3.8907%
  • Non-residents of Philadelphia: Rates changed from 3.4741% to 3.4654%

If you have any questions in regards to these changes, or anything payroll related, please contact Alan S. Isaacs, CPA, MBA, Senior Manager with Sax’s Financial Services Team at (973) 472-6250 or [email protected].

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