Americans' paychecks will be a little smaller in 2013.
While Congress and the president reached a deal to avoid the fiscal cliff - meaning all but the wealthiest Americans will not see an income tax hike - the Social Security payroll tax increased by 2 percent this year.
The payroll tax had seen a temporary 2 percent reduction during the past two years; in 2012, that reduction was worth about $1,000 to a worker making $50,000.
"Each employee is going to end up seeing a reduction in their take-home pay of between $800 and $1,000 over the course of the year, which doesn't sound like a lot to some people, but to some people, that's a big chunk," said a human resources executive with a local industry.
Social Security is financed by a 12.4 percent tax on wages up to $113,700, with employers paying half and workers paying the other half. President Barack Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and 2012.
The Tax Policy Center, a nonpartisan Washington research group, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement negotiated between President Obama and Senate Republicans. High-income families will feel the biggest tax increases, but many middle- and low-income families will pay higher taxes too.
Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center's analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822.
However, the fiscal cliff was just the latest challenge for human resources and payroll officials, who are more concerned about costs from the federal health care reform act.
While the local human resources executive said she didn't yet know how much the implementation of federal health care reform would cost her company in 2013, the company's projections showed an average increase of 7 to 12 percent of costs during the next few years. Not only will the cost of coverage increase, but increased labor costs are expected as a result of increased reporting requirements; future litigation could also be an issue, the executive said.
In order to attempt to keep costs in line down the road, the local industry is focusing its efforts on maintaining grandfathered status for its health insurance plan, which in essence allows plans that don't increase costs for their employees too much to avoid implementing some regulations otherwise required under the Affordable Care Act.
The executive said the costs to keep its current health insurance plan as is have been higher in the short term, but the move is expected to pay off long term.
"For the non-grandfathered plans, there are so many things that are going to be required to be covered that there's no way they're going to be able to prevent double digit increases on a regular basis," the executive said.
And health care costs aren't the only burning issues as some lesser costs are also increasing, the executive said.
Businesses in Georgia must pay more to the state to support unemployment in 2013. Companies pay an unemployment tax on a portion of each employee's wages. In 2013, that portion for Georgia businesses is increasing to the first $9,500 of salary up from $8,500.
"That's something employees won't see, but it's going to affect the employers. When you're talking per person (that adds up)," the human resources executive said.
The Associated Press contributed information to this report.
