Smaller Paychecks Following Payroll Tax Cut

You might notice you received a little less money this month

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    NEWSLETTERS

    TK
    Getty Images/Comstock Images
    Is your paycheck smaller this year? Blame it on a payroll tax cut.

    If you got a paycheck since the New Year, you may have noticed you're getting a little less than you thought. The reason? A payroll tax cut was not renewed by Congress.

    Starting Jan. 1, Social Security Taxes went up to 6.2 percent -- up from 4.2 percent for the last three years.

    People making $50,000 dollars a year are getting about $80 less every month.

    New Paychecks, Smaller Amount

    [DGO] New Paychecks, Smaller Amount
    San Diego residents tell NBC 7 reporter Chris Chan how the payroll tax cut is hurting their wallets.

    And for those struggling to make ends meet, it hurts.

    CPA Steven Wendroff said people are shocked and upset.

    “Especially people who are payday to payday and are counting on a certain amount of take home pay,” he said. “And all of a sudden it's less than they anticipated.”

    Wendroff handles payroll checks for about 100 companies and has received dozens of angry calls.

    Amid the negotiations about income taxes and the fiscal cliff, he said the government didn't renew the 2 percent payroll tax cut that's been in place for the past three years.

    Some people said they don't mind the money going towards Social Security.

    “I don't think it's big,” said local resident Benjamin Roy. “I feel like it's going where it needs to go.”

    Chula Vista resident William Virchis said it could benefit him.

    “Anything to help, because I'm retired. It'd help me,” he said.

    But some people at Food 4 Less in Mission Valley and other places in the county said, that 2 percent really hurts.

    “We've cut spending. We don't take trips, we don't go on vacation,” said Pacific Beach resident Victoria Gracey. “I don't remember the last time we've been on vacation. Everything's cut.”

    Wendroff said people may be able to boost the amount that you get every month by changing your income tax withholding with your employer, but it could mean that you'll owe taxes at the end of the year. He recommends talks to a tax professional for advice.

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