Posted at: 01/11/2013 6:39 PM
By: Jenna Lohse
Paychecks Smaller in 2013
(ABC 6 NEWS) -- Payday is usually a good day, but for the majority of us, this first pay check of 2013 is a bit of a letdown.
"I had heard something about it, but I didn't think it was going to be that much," said Jeannie Hoppin.
"I know it was a temporary reduction, it’s been at what 6 something percent for many years," said Ron Schettle.
For the past two years there's been less social security tax on our pay stubs, but this year, that's no longer the case.
"Employees are finding out with their first pay check the direct result of something that didn't happen," said JoAnn Schoen, Owner of Accounting and Tax Associates in Rochester.
Schoen handles payroll for 90 companies around the Rochester area.
"If you’re salaried you will see your check go down, because if nothing else changes, that two percent did," said Schoen.
She says an employee that makes a thousand dollars every paycheck, will lose 20 dollars. High income employees will face even more taxes.
"They will see an additional point 9 percent withheld. It's an additional Medicare tax on wages above two hundred thousand dollars," said Schoen.
Less money could possibly mean less short term spending.
"I do think that people are going to have less funds in their check book to spend, so they are probably going to be a little bit more conservative," said Schoen.
For some, saving is more difficult.
"A little bit less money is going to go into savings, which is not going to benefit me as much in the future," said Schettle.
"Being on saving mode in my age you know? If anything you'd save a little less," said Nicholas Krahn.
The fiscal cliff deal avoided raising the income tax on the middle class, which would have had a much bigger impact. Lawmakers have announced no plans in cutting the social security tax increase.