Workers who participate in President Donald Trump’s payroll tax deferral will see a temporary increase in their take-home pay, but they’ll likely see smaller paychecks in early 2021.
Sept. 1 marks the first day of Trump’s payroll tax deferral for employees, which he had handed down in an executive order in early August. The holiday is in effect until the end of the year.
Employers and employees split the responsibility for a 12.4% levy that funds Social Security and a 2.9% tax to support Medicare.
The Social Security tax is subject to an annually adjusted wage cap ($137,700 in 2020), but the Medicare tax is assessed beyond that threshold.
