Payroll tax “holiday.” Is your company going to do it? Can you decline?

LadyBeBop

DIS Veteran
Joined
Feb 28, 2009
DH was informed that his pay will be affected as well. Don't know yet about mine for sure (I never know my pay until I get the Oct check :sad2:), but it's likely as I work for a public university. No way for either of us to opt out. I absolutely hate that they are doing this, but maybe I can spin it to our advantage. Like, send the full 12% directly to one of our savings accounts for the rest of the year. It should only feel like a 6% cut in salary, but knowing we are getting twice that in savings would be a nice boost. Then, next spring we won't feel it at all (at least until DD turns 16 in Feb and our insurance skyrockets.
I'm also a Federal employee. No opt-out. No one wants it. We asked and begged to be able to opt out. Nope, nope and nope.

Bad thing is, I'm a fed at the IRS. We have to be current with all tax liabilities. So, if by some reason, they don't take the additional taxes out come January, we'll be on the hook for repayment. Immediately.

I've already arranged to have an additional amount taken from my paycheck to be deposited into my savings account.

Fortunately, my husband's employer is not taking advantage of the payroll tax holiday.
 

wendow

We create happiness.
Joined
Feb 11, 2012
Not sure what my dh's company will be doing but if they actually allow it and we get the extra money, we will be happy to put it away, earn interest on it and then pay back if we need to. Is that not a viable option for others...?
I understand. Just pointing out that no one is forcing anyone to spend the money.
 
  • Kestryl

    DIS Veteran
    Joined
    Mar 29, 2019
    The way I understand it in January they will withhold 12.4% of your pay for 4 mos to make up the 6.2% they are forgoing now thru Dec.31st.

    So, your pay may be 6.2% more now, but it will be 12.4% short(to pay back the 6.2% you get now+ what is normally withheld) come January.

    Plan accordingly if this is going to affect you.
    But what if your pay changes? For example, we normally get raises in January (not sure that it’s happening this year). That can’t be fair to just tax double.
     


  • Befferk

    Love your life and count your blessings!
    Joined
    Aug 5, 2004
    I thought Trump said companies had no choice. I don't want it.
    As noted, companies absolutely do not have to participate in this if they don't want to. As far as individual employees opting out within a company that chooses to do it, I can see where this would be a complete nightmare for the company, and depending on what software they use to process payroll, might even be impossible.
     

    RoseBen009

    Earning My Ears
    Joined
    Feb 19, 2020
    I work for the federal government, and yesterday we were told all are doing it (civilian & military) and cannot opt out.

    I can't begin to state how I feel about not being allowed to opt out of this stupid crazy plan....
    I'm in the SAME boat. This is a horrible idea and I hate that I can't opt out :mad:
     
  • Starport Seven-Five

    DIS Veteran
    Joined
    Aug 16, 2019
    But what if your pay changes? For example, we normally get raises in January (not sure that it’s happening this year). That can’t be fair to just tax double.
    They would have to adjust to only payback what was deferred (which would be less than double). I'm guessing this is one of many headaches that is leading most companies to not bother implementing.
     

    Skywalker3

    Earning My Ears
    Joined
    Jun 10, 2018
    I'm also a Federal employee. No opt-out. No one wants it. We asked and begged to be able to opt out. Nope, nope and nope.

    Bad thing is, I'm a fed at the IRS. We have to be current with all tax liabilities. So, if by some reason, they don't take the additional taxes out come January, we'll be on the hook for repayment. Immediately.

    I've already arranged to have an additional amount taken from my paycheck to be deposited into my savings account.

    Fortunately, my husband's employer is not taking advantage of the payroll tax holiday.
    hey, we're federal too....no choice, I'm also with Treasury, Memphis campus. Where do you work, if I can ask??? Yeah, no way I want to have any tax liabilities.
     

    mikehn

    DIS Veteran
    Joined
    Mar 5, 2008
    As with most of these tax holidays, there are income restrictions. This thing is meant for people who really really really need that extra 6% every paycheck :sad2:
     

    LizzyS

    DIS Veteran
    Joined
    Sep 16, 2011
    Certainly but interest rates are super low so you probably won't earn much, the point of this was to stimulate the economy but if you have to repay it and it is just sitting in savings accounts then why bother, and unfortunately not everyone is disciplined about their finances or financially literate (particularly younger and lower income workers) and some people will spend this money and when they have to repay it in 2021 they will likely be in a jam.
    Yes, exactly. There's no real point to this.
     

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