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CSRS Employees Will Receive No Payroll Tax Decrease in 2011
December 21, 2010
The 'Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of
2010' provides that during 2011 the Social Security employee tax rate will be
temporarily decreased from 6.2% to 4.2%.
The temporary reduction in the Social Security tax rate will not affect the
employee retirement contribution rates for employees under the Civil Service
Retirement System (CSRS), CSRS-offset, or the Federal Employees' Retirement
System.
As a result, CSRS-offset and FERS employees will see their payroll deductions
decrease by 2% up to the 2011 Social Security maximum taxable income of $106,800
(unchanged from 2010). There will be no deduction change based on this Act
for CSRS employees.
What is the effect of the Social Security tax change for employees
under CSRS?
Since they do not pay Social Security, this Social Security change does not
benefit them and there will be no change in their retirement deductions.
What is the effect of the Social Security tax change for employees
under CSRS-offset?
Their Social Security tax will be reduced by 2% and there will be no change
in their retirement deductions.
What is the effect of the Social Security tax change for employees
under FERS?
Their Social Security tax will be reduced by 2% and there will be no change
in their retirement deductions.
Source: OPM, 12/21/2010
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