See Section 202 of the full initiative text. Note: The Payroll Tax Contribution is referred to as the Health Security Assessment.
After an exemption, employers will contribute 8.5% for each employee based on their Gross Pay (GP).
- This is the less than half the average 18% paid now. (Page 41 footnote 79 of Friedman analysis)
- The Payroll Tax Contribution would be assessed quarterly.
Exemption = $15,000 – (Gross Pay x 0.25)
The exemption does not come into play for any Gross Pay above $60,000.
Miguel has three employees: Jane grosses $90,000/yr and Trey and Sara gross $50,000/yr
Jane makes $90,000/yr which does not qualify for an exemption
- 90,000 x 8.5% = $7650/yr or $638/mo
Trey and Sara make $50,000 GP which would qualify for an exemption.
- $50,000 x .25 = $12,500
- $15,000 – 12,500 = $2,500
- $50,000 – 2,500 x 8.5% = $4038/yr or $337/mo
Miguel’s total Payroll Tax contributions would be
|Jane||$7650/yr or $638/mo|
|Trey||$4038/yr or $337/mo|
|Sara||$4038/yr or $337/mo|
|Total||$15,726 or $1311/mo|
More examples for illustration:
|Gross Pay||Payroll Contribution|
Employers with less than 50 employees that experience a hardship due to the Payroll Contribution may be eligible for a waiver or reduction in of this assessment.