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As we gear up for 2025, its time to take a hard look at yourpaycheck.
Spoiler alert: some changes are on the horizon, and they might just affect your bottom line.
Here are somepotential changes to look out for next year.
The main takeaway is that salary increases are expected to dip, said Carlson.
Carlson attributes it to a stabilizing economy and acooling labor market.
But before you dive in pinching pennies, theres a silver lining.
Carlson pointed out, Theres a strong push for pay equity happening.
About 70% of employers are planning to make adjustments to ensure fair pay across the board.
There is really only one change coming to Americans paychecks in 2025, Termini shared.
The wage base to which Social Security taxes apply is rising.
Right now, withholding forSocial Security taxesstops when a persons year-to-date pay hits $168,600.
It ratchets up to $174,900 next year.
What does this mean in dollars and cents?
But before you roll sweating, Termini reassures us that most workers wont feel this pinch.
Most working people will never see any additional withholding, he said.
The reason for this is that the median household income is currently about $78,000.
For these folks, virtually all of their earnings are subject to Social Security taxes.
The Inflation Factor
Carlson also reminded us not to forget about our old frenemy,inflation.
Inflation is still a big factor right now, he points out.
A lot of businesses are projected to keep their salary budgets pretty much the same as last year.
Potential Tax Withholding Changes
Termini hinted at another potential change that could affect your take-home pay.
This is because many payroll providers include the standard deduction to help calculate withholding rates.
Higher earners might see alittle more moneygo into Social Security and other people could benefit from pay equity adjustments.
Of course, these are all just projections based on trends and, as always, things can change.
Stay informed, keep an eye on your paycheck and always talk to your employers about fair compensation.
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