“In this world nothing can be said to be certain—except death and taxes.” An HR professional trying to process payroll today might find the two analogous in ways Benjamin Franklin might have never imagined.

But we’ve got you covered. Below is a comprehensive list of federal tax rates, rules, and contribution limits for 2024.

*Please note that this information is accurate as of January 1, 2024.*

Federal Minimum Wage

Since 1938, the United States has had a federally-mandated minimum wage. The rates for regular, tipped, and federally contracted employees are below. Be sure to check your local laws, as some states and cities have higher minimum wages in place.

Note that “maximum tip credit” refers to the difference between the regular and tipped minimum wages. If an employee’s hourly tips fall under this amount, the employer may be required to compensate them. State and local laws covering this may vary.

Minimum Wage (national) $7.25
Minimum Wage (tipped employees) $2.13
Maximum Tip Credit $5.12
Minimum Wage (federal contractors) $17.20

Federal Income Tax Rates

Understanding how US federal tax rates are structured is crucial for individuals and businesses alike. This section provides a clear breakdown of the current tax brackets, with the percentage of income taxed at different levels.

Tax Rate	Single	Married filing jointly	Married filing separately	Head of household
10%	$0 to $11,000	$0 to $22,000	$0 to $11,000	$0 to $15,700
12%	$11,001 to $44, 725	$22,001 to $89,450	$11,001 to $44, 725	$15,701 to $59,850
22%	$44,726 to $95,375	$89,451 to $190,750	$44,726 to $95,375	$59,851 to $95,350
24%	$95, 376 to $182,100	$190,751 to $364,200	$95, 376 to $182,100	$95,351 to $182,100
32%	$182,101 to $231,250	$364,201 to $462,500	$182,101 to $231,250	$182,101 to $231,250.
35%	$231,251 to $578, 125	$462,501 to $693,500	$231,251 to $346,875	$231,251 to $578,100
37%	$578,126 or more	$693,501 or more	$346,876 or more	$578,101 or more

FICA - Social Security & Medicare

The Federal Insurance Contributions Act (FICA) tax is paid for by employees and employers in order to fund Social Security and Medicare.

The amount of employee earnings subject to taxation is capped. These caps and the tax rates for both social security and medicare are below:

Social Security

Social Security Taxable Wages Up to $160,200
Social Security Tax Rate (Employee) 6.2%
Social Security Tax Rate (Employer) 6.2%
Social Security Tax Rate (Self-Employed) 12.4%

Medicare

Medicare Tax Rate (Employee)
Up to $200,000 in earnings, 1.45%
Additional Medicare Tax Rate (Employer)
Past $200,000 in earnings, 0.9%
Medicare Tax Rate (Employer)
All wages, 1.45%

FUTA

The Federal Unemployment Tax Act (FUTA) is a tax paid by employers based on employee wages. The tax supports unemployment compensation for individuals who have lost their jobs. After an employee’s year-to-date wages cross a certain threshold ($7,000), an employer no longer has to pay the tax.

Taxable Wages per Employee $7,000
FUTA Tax Rate 6%

Supplemental Tax Rates

If an employer pays its workers wages outside of their regular salary (like bonuses or severance payments), these awards are considered “supplemental” and subject to a higher tax rate.

The tax rates for these types of payments are below. Note that any supplemental wages beyond the $1 million mark are taxed at a higher rate.

Supplemental Tax Rate 22%
Supplemental Tax Rate (for wages beyond $1m) 37%

Retirement Limits

The federal government places an annual limit on how much employees can contribute to their company’s retirement plans. These limits are regularly adjusted by the IRS to compensate for changes in the cost-of-living.

Note that once an employee is 50 years old, he or she will be eligible for a higher maximum, called a “catch-up” limit.

	Annual Limit	Annual Limit (age 50 or over)
401k, 403b, and 457	$23,000 per year	$30,500
SIMPLE IRA Plans	$16,000	$19,500

HSA Contribution Limits

Health Savings Accounts (HSAs) are a great way for some employees to pay for medical expenses. The funds stored in an HSA are tax deductible and the funds can be carried over from year-to-year.

The IRS places limits on how much employees are able to contribute to their HSA. Similar to some retirement plans, older employees are allowed to contribute slightly more to “catch-up.”

	Annual Limit	Annual Limit (age 55 or over)
HSA Single Contribution	$4,150	$5,150
HSA Family Contribution	$8,300	$9,300

FSA Contribution Limits

A Flexible Spending Account (FSA) allows employees to use pre-tax funds to pay for certain out-of-pocket healthcare costs.

The funds must generally be used within the plan year—however, employers can either offer employees a “grace period” of 2 ½ months or allow them to carry over $500 to the following year.

Like many other pre-tax benefits, employee contributions are capped. The limit for 2020 is:

	Annual Limit
FSA Single Contribution	$3,200

Commuter Contribution Limits

Employees are permitted to contribute pre-tax dollars, up to a limit, to certain work-related transportation costs. Covered costs include transit passes, vanpooling, and parking expenses. Not all transportation costs are covered—the cost of fuel, for example, is not eligible. Note that states may have their own pre-tax contribution limits, too.

	Annual Limit
Transit Passes	$315 per month
Parking Allowance	$315 per month

The content of this publication is provided for informational purposes only and does not contain or constitute tax or legal advice. You should not act on this information without seeking tax or legal professional counsel.

Looking for tax information for a particular state?

FAQs About Federal Payroll Tax Rates

Federal payroll taxes are mandatory contributions deducted from employees’ wages to fund various government programs. These taxes typically include Social Security and Medicare taxes, collectively known as Federal Insurance Contributions Act (FICA) taxes, as well as federal income tax withholding.

In the US, federal income tax rates range from 10% to 37%. Your tax rate is determined by your level of income and your filing status (whether you are single, married, or married filing separately). Although tax brackets will remain the same until 2025, income thresholds are regularly adjusted for inflation.

Federal payroll taxes are typically due on a monthly or semi-weekly schedule, depending on the size of the employer’s payroll. Small employers often deposit taxes monthly, while larger employers may have more frequent deposit requirements. It’s crucial to adhere to the deposit schedule to avoid penalties.

In cases where the state minimum wage is lower than the federal minimum wage, employers are required to pay the higher federal minimum wage. Federal law takes precedence in this situation, ensuring that employees receive at least the federally mandated minimum wage, even if it exceeds the state’s minimum wage.

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