December 9, 2022

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Social Security gets a boost

The Social Security Administration recently announced that Social Security benefits will be increasing in 2023 due to continued inflation, and the boost will be the highest we’ve seen in four decades. The new cost-of-living adjustment (COLA) is 8.7%. Previously, the highest increase was 2022’s cost-of-living adjustment, which was 5.9%. 

This means if you receive Social Security benefits, you’ll get over $140 more a month starting in January. If you haven’t claimed your benefits yet, you can claim them now and get access to the record-high COLA, or you can delay them, which could end up increasing the amount in your monthly checks.  

Paycheck calculations made simple 

As a business owner, it’s crucial to understand the details of your finances—but that doesn’t mean you have to crunch all the numbers yourself. If you need support determining withholdings and calculating take-home pay for your various employees, we’ve got you covered. Gusto just launched our series of salary and hourly paycheck calculators for all 50 states. 

Whether you want to double-check your payroll math or see what your employees would take home if you adjusted your compensation plan, our calculator makes it simple. All you have to do is input basic information on your employee’s salary, W-4 details, benefits, and deductions. Then we’ll take care of the rest. Want to get started? Use the following links to find your state’s salary paycheck calculator and hourly paycheck calculator

Don’t forget to share these calculators with your employees so they can get a detailed look at how their paychecks are broken out.

Your guide to 2023 contribution limits

Some of the most meaningful benefits you can offer employees are health benefits (obvi) and a retirement plan. In fact, recent Gusto data found that employees with an active retirement plan are 32% less likely to leave their current employer in any given month.

If you already offer these benefits or want to set them up, it’s important to understand contribution limits for employees. Here are the updated contribution limits for common health and retirement benefits in 2023:

2023 contribution limits for retirement plans:

  • 401(k) for employees under the age of 50: $22,500
  • 401(k) for employees age 50 or older: $30,000
  • SEP-IRA: $66,000 or 25% of the employee’s income (whichever number is lower)
  • SIMPLE IRA for employees under the age of 50: $15,500
  • SIMPLE IRA for employees age 50 or older: $19,000

2023 contribution limits for HSAs:

  • For individuals with self-only HDHP coverage: $3,850
  • For individuals with family HDHP coverage: $7,750
  • Anyone 55 or older can add $1,000 to the above contributions

2023 HDHP minimum deductible amounts and maximum out-of-pocket costs: 

  • Minimum deductible amount for self-only coverage: $1,500
  • Minimum deductible amount for family coverage: $3,000
  • Maximum annual out-of-pocket cost limit for an individual: $7,500
  • Maximum annual out-of-pocket cost limit for a family: $15,000

2023 contribution limits for HRAs:

  • QSEHRA contribution limit for an individual: $5,850 annually ($487.50 per month)
  • QSEHRA contribution limit for a family: $11,800 annually ($983.33 per month) 
  • EBHRA contribution limit: $1,950 annually

Pay attention to pay transparency laws

A couple months ago, we announced the passage of California’s new pay transparency bill. Now’s a good time to brush up on the law as it will go into effect in a few weeks’ time on January 1, 2023.

Pay transparency laws, which fall under the umbrella of pay equity, assert that employers have a legal obligation to share compensation details with current and prospective employees. The pay transparency push is part of a larger movement toward improving pay equity by reducing gender and racial pay gaps—and by giving job seekers more information and negotiating power during the hiring process. 

California’s new pay transparency law requires employers to provide employees (upon request) with the pay scale for the position they’re currently employed in. The law also requires employers with 15 or more employees to include the pay range for positions in job postings. If you’re a California business owner, find out how you can prepare for the new change and make sure you’re following the law. 

Other states with recent pay transparency laws include Colorado, Connecticut, Maryland, Nevada, Washington, Rhode Island, and Ohio. New York City’s pay transparency law took effect on November 1, 2022, and the rest of the state is—almost—on board, too. The New York State Legislature passed a pay transparency law that just needs to be signed by the governor to become official. 

Curious about how to improve your business’s pay equity? Start by checking out your state’s pay equity laws.

Fresh from Gusto (and friends)

Watchlist

ONGOING: How to Examine Your Financials as You Round Out the Year

Reviewing your finances before the end of the year is a smart way to gauge your business’s overall health and adjust your revenue targets and goals for the new year. If you want more support and guidance for evaluating your financial documents and statements, this webinar from Entrepreneur and Oracle NetSuite can help. You’ll learn which key performance metrics to track for your industry, how experienced CFOs balance short-term success with long-term growth, and best practices for making more strategic financial decisions. Watch the webinar now.

DEC 13: Your Next Move—Pioneering Your Big Idea 

Need some inspiration for your business’s new year’s resolutions? This webinar—hosted by Inc. and Capital One Business—is a great starting point. Join Anne Wojcicki and Beatrice Dixon, the two powerhouse women CEOs behind 23andme and The Honey Pot Company, as they offer advice and discuss the lessons they’ve learned as entrepreneurs. You’ll learn how to execute your big idea, grow as a leader, and scale while staying true to your vision. Register here.

DEC 14: What to Expect in 2023—Data-Driven HR Predictions

As 2023 approaches, it’s a good idea to get a feel for the employee trends, hiring insights, and HR obstacles ahead. This webinar brings together experts from Checkr, Bonusly, and Lever to recap 2022 phenomena and share data-driven HR predictions on the upcoming year. You’ll learn how to evaluate your HR technology, how to develop and retain excellent employees, and how to grow from this past year’s challenges. Register here
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Mohini Kundu Mohini Kundu is a news editor on the Gusto content team. She studied journalism at Northwestern University and started her career at The Huffington Post before embracing the #startuplife.
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