UpDate - Vol. 13, No. 13, Page 11
December 2, 1993
Tax changes for 1994

     The Social Security Administration has announced the maximum taxable
earnings and the rates for FICA and FICA Medicare for 1994.
     The rates have remained the same, but the maximum taxable earnings
have increased as follows:
     The FICA rare is 6.20 percent on earnings up to $60,600 for a maximum
employee tax of $3,757.20. The FICA Medicare rate is 1.45 percent, with no
limit on earnings and no maximum employee tax.
     During 1993, the maximum taxable earnings were $57,600 for FICA and
$135,000 for FICA Medicare.
     Also effective for 1994, the income tax withholding rate on
supplemental wage payments has been increases to 28 percent for federal
income tax and remains 5 percent for state taxes, totaling a combined rate
of 33 percent.
     During 1993, the combined withholding rate for federal and state was
25 percent (20 percent for federal and 5 percent for state). This flat rate
is used for "S" contract payments to regular University employees and for
all retroactive payroll payments.
     Any questions about this information my be directed to the Payroll
Office at 831-2178.