As of January 1, 2017, the taxable wage base increased to $127,200, up $8,700 from the $118,500 limit that had been in place since 2015. As a result, higher-income workers will pay more FICA taxes, and there is the possibility that companies will pay more FICA tax dollars in 2017 when paying severance. Did you know there is a way companies can be exempt from FICA tax altogether for employees involved in an involuntary reduction-in-force?
When a company considers layoffs, the leadership and HR teams have a lot to think about. Who will be impacted? What benefits will they receive and for how long? How will the reduction-in-force impact the health of the business? For many companies, one of the last considerations is one of the most important — what's the best way to help their former employees transition to new employment quickly and with the best support services? An Employment Transition Benefit ("ETB") Plan may be the answer.