Hopefully, you don’t think so.

President Trump announced an executive order for all Americans earning less than $100k/yr to be granted a payroll tax holiday.

What does this mean?

Payroll tax is required to be paid by all citizens having earned income.

There are two portions of payroll tax that add up to 15.3% of all wages earned to be paid to fund the government programs Social Security and Medicare.

This is typically paid in two portions: employee 7.65% and employer 7.65%.

Self-employed business owners pay the full amount: 15.3%.

For employees earning less than $100k/year they will be temporarily exempt from paying their share of the payroll tax until the end of the year and the same for business owners.

The details of actually making this happen are not 100% clear but most payroll companies are equipped to deal with this.

Let’s talk today about what this means for you as a soon to be retiree and also for the average worker in the United States.