Paycheck changes in New Year

GREEN BAY - Friday marked the first payday since the fiscal cliff compromise.

The deal increased the Social Security payroll tax for everyone.

If you got paid. Check your check. Chances are it has less money in it.

"This is dramatic for employees, especially when a lot of people are living paycheck to paycheck," said Kat Meissner, owner of Wisconsin Pay Specialists.

The fiscal cliff deal delivered a tax hike for most workers: the end of a Social Security tax cut.

"Basically we went back in time two years. Two years ago the government tried to stimulate the economy by giving us a vacation on the Social Security," Meissner said.

The cut expired Monday, and the tax increased from 4.2 percent back to 6.2 percent.

Meissner said the increase has caused confusion for many people.

"We got many, many calls saying our taxes aren't right on our check and this isn't right! So it's been quite a week," said Meissner.

Here's how the new change breaks down:

According to the Tax Policy Center, households making between $40,000 and $50,000 a year will see their taxes increase about $580 for the year. That's a $22 reduction in pay on a bi-weekly paycheck.

Those making between $50,000 and $75,000 a year will face an average tax hike of about $820. That's a $32 reduction in pay on a bi-weekly paycheck.

You may be wondering why this Friday's paycheck included the tax hike. After all, workers put in half of those hours in 2012, before the cut expired.

"Payroll is based on the effective date, which is essentially the pay date. So whatever date is actually the date of your paycheck, that's the date that it's effective for, regardless of when the hours were worked," said Meissner.

Meissner said it's possible Congress could still make changes to lower the payroll tax. However, she added lawmakers discussed this issue at length, and she suspected the 6.2 percent is here to stay.