How the Fiscal Cliff Agreement Affects Your Paycheck - KTVN Channel 2 - Reno Tahoe News Weather, Video -

How the Fiscal Cliff Agreement Affects Your Paycheck

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Your tax rates are not going up under the Fiscal Cliff agreement. But your paychecks will be smaller, starting with your next paycheck.

That's because the two-year-old payroll tax holiday is over so the rate going from 4.2% back up to 6.2%.

Here's how it affects your bottom line:

If you're making $30,000 a year, you'll pay about $50 more a month in taxes.

If you're earning $50,000 a year, you'll contribute about $83 more a month.

And if you make $113,700 a year, you'll pay an extra $189.50 a month in taxes.

The payroll tax, by the way, funds Social Security.

The lower rate was costing the government $120-billion in tax revenue a year.

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