Federal and State Payroll Updates 2021 | OnPay

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Federal and State Payroll Updates - 2021

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A number of states and the District of Columbia have payroll-related changes that will take effect in the new year. These changes include minimum wage changes, updated state unemployment wage bases, and new paid sick leave laws. A current listing of enacted leave laws can also be found by clicking here.

2021 Federal Changes

Updated November 17, 2020

Social Security Wage Base Changes – Effective 1/1/2021

2020 2021
Social Security Wage Base $137,700.00 $142,800.00

 

FSA Limit Changes – Effective 1/1/2021

2020 2021
Health FSA Limit $2,750.00 $2,750.00
Dependent Care Limit $5,000.00  $5,000.00

 

HSA Limit Changes – Effective 1/1/2021

2020 2021
Individual HSA Limit $3,550.00 $3,600.00
Family HSA Limit $7,100.00 $7,200.00
HSA Catch-up Contribution (age 55+) $1,000.00 $1,000.00
Individual HDHP Out-Of-Pocket Max $6,900.00 $7,000.00
Family HDHP Out-Of-Pocket Max $13,800.00 $14,000.00

 

Mileage Reimbursement Changes – Effective 1/1/2021

2020 2021
Business Miles Driven $0.575  TBA
Moving Mileage Reimbursement No longer allowed No longer allowed

 

Transportation Benefits – Effective 1/1/2021

2020 2021
Parking Allowance – Per Month $270.00 $270.00
Transit Allowance – Per Month $270.00 $270.00

 

Qualified Small Employer HRA (QSEHRA) – Effective 1/1/2021

2020 2021
Single – Monthly $437.50 $441.67
Family – Monthly $883.33 $891.67
Single – Annual $5,250.00 $5,300.00
Family – Annual $10,600.00 $10,700.00

 

401(k), 403(b), 457 Plan Limit Changes – Effective 1/1/2021

2020 2021
Maximum employee elective deferral $19,500.00 $19,500.00
Employee catch-up contribution (if age 50 or older by year-end) $6,500.00 $6,500.00
Employee compensation limit for calculating contributions $285,000.00 $290,000.00
*The $6,500 catch-up contribution limit for participants age 50 or older applies from the start of the year to those turning 50 at any time during the year.

 

IRA Contribution Limits – Effective 1/1/2021

2020 2021
Traditional IRA $6,000.00 $6,000.00
Roth IRA $6,000.00 $6,000.00
Employee catch-up contribution (if age 50 or older by year-end) $1,000.00 $1,000.00
*The $1,000 catch-up contribution limit for participants age 50 or older applies from the start of the year to those turning 50 at any time during the year.

Check out our guide to the payroll process for more information, or try out our employer payroll calculator to see how these taxes are applied in practice.

 

Jacob Thomas is the Marketing and Technical Writer for OnPay. He has more than 10 years experience in writing about and teaching technology. He lives and works in his hometown of Atlanta.