Changes to look for in your January paycheck
It’s always a good idea to take a close look at your first paycheck in January to confirm your benefits enrollments and your voluntary pretax contributions (for example, for flexible spending accounts, retirement savings or commuter costs). Changes in your benefits coverage and rates, or in your voluntary contribution to retirement savings, will be reflected in your paycheck.
You may see other changes depending on your situation — for example, if you requested a change in your tax withholdings or transitioned from casual to career status (which changes your deductions for retirement benefits).
Unlike prior years, you will not see a change in the federal tax withholding in your January paycheck. Due to the recent Federal tax bill, with changes proposed for tax rates and brackets, the IRS has postponed publishing the annual tax table update (Notice 1036). Instead, the IRS plans to release this update sometime in January, with an effective date as early as Feb. 1.
Despite that delay, there are a few IRS changes you may see reflected in your January paycheck:
- The OASDI (old age, survivors and disability insurance) tax will be withheld from income up to $128,400 in 2018. If you reached the maximum last year, your deductions will restart in January.
- The Additional Medicare Tax will restart if your salaries and wages exceed $200,000 for 2018.
- The annual deferral limit for 403(b) and 457(b) plans increased from $18,000 to $18,500.
If you have any questions about your paycheck, contact UCPath.