Sent: Tuesday, September 8, 2020 9:31 AM
Subject: Payroll Tax Deferral 


Payroll Tax Deferral 


On 8 August 2020, President Trump signed an Executive Order to defer payroll taxes for associates making  $4k or less per pay period. This payroll tax deferral applies to all qualifying Exchange associates beginning Sept. 4. There is no opt-out option for this deferral. 


Essentially, associates will see a temporary increase of approximately 6% in their take-home pay through the end of the payroll year. Beginning next year, pending any Congressional legislative relief, associates would see a temporary decrease in take-home pay, effectively doubling an associate’s FICA obligation during the designated repayment period of January through April. Please note that the memorandum authorizing the payroll tax deferral states, “The Secretary of the Treasury shall explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.” 


The payroll tax deferral applies to the Federal Insurance Contributions Act (FICA), also known as the Social Security tax. Associates pay 6.2% of their salary in FICA taxes per pay period. 


What is the Payroll Tax Deferral

  • Associates making less than $4K per pay period will have their FICA taxes deferred from 1 September 2020 – 25 December 2020 
  • FICA taxes that are deferred would require repayment by the associate between 1 January 2021 – 30 April 2021 through payroll deduction, pending any Congressional legislation


Click here for an example on how the payroll tax deferral could affect your pay.


Items you should consider 

  • Setting extra money aside today could be helpful if there is a requirement to repay deferred taxes next year and FICA deductions effectively double in the beginning of 2021
  • Consult a financial or tax advisor
  • Access our EAP financial topics by clicking here 


For questions, contact HR Policy at