“Bottom line, it’s reducing the amount of federal tax being taken out of their paycheck.”
Reynolds said on average employees are seeing an extra $40 in every two-week paycheck and $1,056 annually per employee, about $81,747 total per pay period for all county employees.
Trump signed the Tax Cuts and Jobs Act on Dec. 22. It cuts the corporate tax rate from 35 percent to 21 percent beginning in 2018. The top individual tax rate will drop to 37 percent. It cuts income tax rates, doubles the standard deduction and eliminates personal exemptions.
Because of the late passage of the legislation, Reynolds said many workers will not see the lower federal tax rates reflected in their paychecks until mid-February. Payroll departments must make the change by Feb. 15.
He said he did get calls from employees after the pay hikes showed up.
“That might be one of the best things I’ve been able to do since I’ve been in office, to actually reduce the federal withholdings from everyone’s paychecks. It’s really a big deal,” Reynolds said. “I’ve been in the accounting world for over 25 years and it’s rare that you ever get the chance to increase someone’s take-home pay by reducing the federal taxes.”
Not only are employees seeing a bit more in their regular paychecks, but Dan Bates, president and CEO of the Greater Hamilton Chamber of Commerce, said some employers are sharing their increases — due to tax code changes — with their employees.
“There are many benefits to small business that actually increase their bottom line,” Bates said. “It gives a little bit more money in the employees’ pockets, and we have heard of other businesses that are looking at giving employees bonuses based on the tax laws.”