Paychex has introduced a new Web page and online calculator to help businesses determine their tax savings if they take advantage of the recently passed HIRE Act to hire new employees.
The Web page provides the latest information available on the act, and features an interactive calculator. Employers can indicate the month of hire; type of pay (salary or hourly); and the annual salary or hourly wages, plus the hours per week. The calculator then computes the amount of the potential Social Security tax savings and business tax credit.
The Hiring Incentives to Restore Employment Act offers employment tax breaks for businesses that hire unemployed people, and extends further benefits to employers if those workers remain on the job for more than one year.
Employer benefits of the HIRE Act extend to organizations that take on people who have worked fewer than 40 hours in the 60 days before they are hired. There are two major tax incentives for employers:
Businesses save the 6.2 percent employer portion of the Social Security tax for any qualified individuals hired after Feb. 3 and before Jan. 1, 2011. The available break is up to $6,622.00 for each new employee, depending on wages paid. Wages paid between March 19, 2010, and Dec. 31, 2010, can qualify for the credit.
Employers get a tax credit of up to $1,000 after one year of employment for each employee hired under the provisions of the act. For the employer to claim this credit, wages paid during the previous 26 weeks must equal at least 80 percent of the workers wages during the first 26 weeks of employment.
Paychex officials say that the act does not place a limit on the total hires for each company, and it does not permit employers to terminate employees in order to make room for those who would enable companies to receive benefits.
For the latest on the HIRE Act, including the calculator to estimate potential savings, visit www.paychex.com/hireact.
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