Payroll Contribution

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.

Calculation Example

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

Employee Contribution
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
$20,000 $71/mo
$40,000 $248/mo
$60,000 $425/mo
$80,000 $567/mo
$100,000 $708/mo

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.