Thanks to Uncle Sam and a newly enacted tax law, about 90 percent of U.S. workers can expect a bump in their take-home pay this year.
Employers were required to start using new Federal Tax Withholding Tables to calculate withholding amounts in paychecks on Feb. 15, but that’s about where employer requirements end. After that, it’s really up to employees to take the initiative to review their withholdings and file new W-4s with their employers if they want to make any adjustments.
Employers don’t have to encourage employees to review their withholding amounts and they don’t have to put a call out for new W-4s every year—but maybe they should.
Sharing information about a new IRS withholding calculator (which, by the way, was released this week) isn’t something that you have to do. And there’s no clear-cut ROI on doing something like that. But it’s more about the cumulative effect of doing right by your employees (in this case, making sure that extra money Uncle Sam is promising actually becomes a reality for them). And when you do the right thing and take the time for such leadership communication, even when it’s not mandated by the federal government, employees take notice. They appreciate your looking out for their best interests.
When employees feel valued, when they know that you care about them, they’re more likely to stick around. So, if you want to do the right thing, but don’t have much time to do it, we’ve made it easy for you. Just copy and paste the following into an email to all employees.
Send This Email to Your Employees
Subject: New Tax Law Means It’s Time to Review Your Withholdings
Body: The new tax law, which went into effect Jan. 1, has some pretty big changes that may have already started affecting your paycheck and could impact your tax bill come April 2019.
As your employer, we’ve done what we’re required to do (which was use new withholding tables to calculate your withholding amounts in paychecks).
But as your employer, we also want to encourage you to take a few minutes and review your withholdings.
There’s an easy-to-use withholding calculator available at IRS.gov, which can help you determine your withholdings under the new tax law. You can also always check with your accountant or tax advisor on whether you need to make adjustments to your withholdings in light of the tax changes or life events like marriage, having children or taking on a second job.
The goal is to avoid under-withholding (which means you would owe Uncle Sam money on April 15, 2019) or over-withholding (which means you would be due a refund). Instead, you want to get as close to the correct amount as possible.
If you decide you want to adjust your withholdings, you’ll need to give us a new Form W-4. You cn do this at any point during the year, and the change will generally be reflected in your next paycheck.
Here are some links that may help you determine your withholdings:
[Insert your name here]