2015 HR alerts: changes in contribution limits Email
Wednesday, November 12, 2014 06:00 PM

Changes are ahead that will require companies and their HR teams to be prepared before issuing the first payroll in 2015. Below is a summary of changes and other information that HR people need to know as they prepare for the new year.

Social Security & Medicare
The Social Security Wage Base for 2015 will increase from $117,000 in 2014 to $118,500 effective January 1, 2015. The maximum yearly Social Security tax withholding amount rises to $7,347 (6.2% of $118,500). The 6.2% contributed by the employee is matched by the employer.

Medicare tax remains at 1.45% for most employees (matched at 1.45% by employers) with no limit on income.

Retirement Plans
401K Plans. The maximum annual amount an employee can contribute to a 401(k) Plan during 2015 increases to $18,000. Employees age 50 and above can contribute an additional “catch-up” contribution of $6,000, for a total maximum contribution of $24,000.
IRA Plans. The maximum annual amount an employee can contribute to a traditional IRA or a Roth IRA in 2015 remains unchanged at $5,500; the additional catch-up contribution for employees age 50 and above remains $1,000, for a total contribution of up to $6,500.
Simple IRA’s have a maximum annual contribution of $12,500 for employees in 2015; up from $12,000 in 2014. Employees age 50 and above have a catch-up contribution limit of $3,000, up from $2,500 in 2014, and a total contribution limit of $15,500 in 2015.

Dependent care & FSAs
The Dependent Care annual limit under Section 125 remains at $5,000 for married and filing joint returns and $2,500 for married filing separate returns. The limit on contributions to Flexible Spending Accounts increases from $2,500 to $2,550 in 2015. 

Colorado minimum wage increases
Colorado’s Minimum Wage increases from $8.00 per hour to $8.23 per hour, effective January 1, 2015. The Tipped Employee’s Minimum Wage increases to $5.21 per hour, also effective January 1, 2015.

Mileage rates
The current 2014 IRS standard mileage rates are: $0.56 cents per mile for business miles driven; $0.23.5 cents per mile for medical or moving purposes; and $0.14 cents per miles driven in service of charitable organizations. The 2015 standard mileage rate will be announced in December 2014.

Employer compliance
Employers are required to comply with the following federal legislation (number of employees listed in parenthesis):

  • Immigration Reform and Control Act (Form I-9) (1 or more employees)
  • Colorado Affirmation Form (1 or more employees)
  • USERRA (1 or more employees)
  • Fair Labor Standards Act (1 or more employees)
  • Americans with Disabilities Act (15 or more employees)
  • Age Discrimination in Employment Act (20 or more employees)
  • Family and Medical Leave Act (50 or more employees)
  • EEO-1 Reports (100 or more employees; 50 or more for federal contracts)

Courtesy Ned Frazier, Frazier International, which provides human resource consulting for growing companies and publishes HR Alerts to business clients and colleagues. www.frazierintl.com

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