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End of Payroll Tax Cut Promises Slimmer Paychecks Today

Americans will see the feds taking a bigger bite out of their paychecks when they get their paychecks on Friday, the first pay day of the new year

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    NEWSLETTERS

    Amid all its wrangling last month over tax rates for the wealthy, Congress let a 2 percent Social Security payroll tax cut expire.

    Many American workers will get their first glimpse of how Washington's fiscal cliff fight affected them when they open their paychecks today.

    That is because amid all its wrangling last month over tax rates for the wealthy, Congress also let a 2 percent Social Security payroll tax cut expire on all workers subject to it — reverting the payroll tax you pay to 6.2 percent of your paycheck from the 4.2 percent you were paying for the last two years.

    Read More: Why Your Payroll Tax Will Rise This Year

    With that tax cut no longer reflected on your paycheck, the average American could pay as much as $2,202 more in payroll taxes this year than last year, according to The Wall Street Journal. (That is because the maximum wage subject to the tax is $110,100.)

    If you make $50,000 a year, you'll take home $1,000 less annually. If you get paid every two weeks, that means your paycheck will be $38.46 less today than it was two weeks ago.

    For more on what to expect, check out a primer on the fiscal cliff's impact.

    You can also read the Internal Revenue Service's new guide here and the Tax Policy Center's tax calculator here.