Employer Payroll Contribution

Employers will collect a contribution for each employee.

After an exemption, the Employer Payroll Contribution is a total of 10.5% of gross pay.

  • Employers are able to deduct up to 2% from the employee’s wages.  See Employee Payroll Deduction.
    • If the employer deducts 2% from employee’s wages, the employer’s contribution would be 8.5%. OR
  • Employers may choose to pay the employee’s 2% contribution on behalf of their employees as a benefit of employment.

The Employer Payroll 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 two employees: Jane and Trey.

Jane makes $90,000/yr which does not qualify for an exemption.

  • Employer’s Contribution
    90,000 x 8.5% = $7650/yr or $638/mo
  • Employee’s Deduction
    (employer may pay on behalf of employee)
    90,000 x 2% = $1800/yr or $150/mo

Trey makes $50,000/yr which would qualify for an exemption.

  • $50,000 x .25 = $12,500
  • $15,000 – 12,500 = $2,500
  • Employer’s Contribution
    $50,000 – 2,500 x 8.5% = $4038/yr or $337/mo
  • Employee’s Deduction
    (employer may pay on behalf of employee)
    50,000 – 2,500 x 2% = 950/yr or $79/mo
More Examples

Gross Pay

Employer’s 8.5% Contribution

Employee’s 2% Deduction

Employer may pay on behalf of employee

$20,000 $71/mo $17/mo
$40,000 $248/mo $58/mo
$60,000 $425/mo $100/mo
$80,000 $567/mo $133/mo
$100,000 $708/mo $167/mo

Employers with less than 50 employees that experience a hardship due to the Payroll Contribution may be eligible for a waiver or reduction of this assessment.

See Page 29, Section 202-203 of the full bill text for details. In the bill, the Payroll Tax Contribution is referred to as the Health Security Assessment.