Mileage Rate, Minimum Wage and 401(k) Limits Increase for 2015
Annual Payroll and Withholding Update Part 1 of 5
Even though gas prices are at their lowest in years and expected to stay that way for 2015, the reimbursement rate for business miles is up 1.5 cents per mile. Other items on the rise are the minimum wage and deferral limits for retirement plans. These are outlined in Anders’ Annual Payroll and Withholding Update.
Standard Mileage Rate
The standard mileage rate for 2015 will be 57.5 cents per mile. This rate is for all business miles. The 2015 rate for medical travel and moving costs will be 23 cents per mile. The charitable mileage rate will remain at 14 cents per mile.
The Missouri minimum wage will increase to $7.65 per hour effective January 1, 2015. The Illinois minimum wage will remain at $8.25 per hour which was effective July 1, 2010.
Employees under the age of 20 can continue to be paid $4.25 per hour during their first 90 consecutive calendar days of employment with an employer except where a higher state or local minimum wage standard applies. Employers of “tipped employees” must comply with minimum wage laws, but can claim a tip credit against their minimum wage obligation.
401(k) Elective Deferral Limits, SEP and SIMPLE Plan Thresholds
The limitation on 401(k) elective deferrals will increase from $17,500.00 in 2014 to $18,000.00 for 2015.
The compensation an eligible employee must have in order to be a SEP participant will increase from $550 to $600 in 2015.
The maximum employee salary reduction contribution to a SIMPLE plan will increase to $12,500.00 in 2015, from $12,000.00 in 2014.
Catch-up contributions for retirement plan participants age 50 and older will be permitted in 2015, if plans have been amended to accept the catch-up contributions. Participants age 50 and older will be able to make additional 2015 401(k) contributions of $6,000.00 or SIMPLE contributions of $3,000.00.