HR Guide - End-of-Year Payroll Reminders: 2022 ➨ 2023
Number of Pay Periods
There are 26 pay periods in calendar year 2022, the final official pay date will be December 27, 2022. Calendar year 2023 will also have 26 pay periods.
Calendar Tax Year
The 2022 taxable earnings year is from PP 2022-01, beginning December 19, 2021, through PP 2022-26, ending December 17, 2022. The 2023 taxable earnings year is from PP 2023-01, December 18, 2022, through PP 2023-26, December 16, 2023.
The 2022 leave year ends PP 2023-01, December 31, 2022. Employees in the six-hour leave category will get their extra four hours in PP 2023-01, the last full pay period of the calendar year.
The 2023 leave year is from PP 2023-02, January 1, 2023, through PP 2024-02, January 13, 2024 (27 pay periods). Employees in the six hour leave category will get their extra four hours for 2023 in PP 2024-01, the last full pay period of the calendar year.
For your convenience, you can review, print, or download the 2023 payroll calendar from the IBC Payroll Schedule Calendars web page.
The target date for Wage and Tax Statements (W-2 forms) to be available for viewing and printing in Employee Express (EEX) is January 14, 2023. In addition, hard copy W-2s will be provided to all employees who did not elect to turn off the printed W-2. Hard copy W-2s will be mailed no later than January 31, 2023. Printed W-2s will be sent to the employee’s address of record. We encourage everyone expecting a printed W-2 to verify their address of record is accurate in EEX. Employees should also verify their address of record is correct if they submitted a forwarding or change of addresses to the U.S. Postal Service. Any corrections or changes to addresses should be completed by December 16, 2022, to ensure receipt of hard copy W-2. The address may be verified by reviewing the latest electronic Leave and Earnings Statements in Employee Express.
If you would like to make the election for the electronic 2022 Form W-2, these changes must be processed prior to December 27, 2022. There are many advantages to receiving your W-2 electronically:
- Your W-2 is conveniently available to view, print or save at any time on a safe and secure website anywhere there is internet access.
- You reduce the risk of identity theft associated with a lost or stolen form as a result of postal delivery.
- You can access your W-2 earlier than the mailing of the hard printed copy (the 2022 Form W-2s will be available January 14, 2023, as opposed to being mailed by January 31, 2023).
- There’s one W-2 with multiple states and localities.
- The W-2 instruction sheet is available in EEX.
- You can access five most recent years’ worth of W-2s.
- The W-2C form, Corrected Wage and Tax Statements, is updated on a daily basis.
- You are choosing an environmentally friendly alternative.
Here’s how to change your election from a hard printed copy to an electronic version:
- Access Employee Express
- Log in using your user ID and password or your PIV card
- Select the “W2 Hard Copy On/Off” link under in the Payroll-Personnel Actions section in the left column of the Main Menu page
- Select the Off option and Save
- Confirm your election
- Input your email address if you wish to receive confirmation of your election
If you elect this option, you agree and acknowledge that you will obtain your W-2 directly from EEX and a hard copy will not be mailed to you. Employees who separate will automatically receive a hard copy by mail. For assistance with EEX user IDs and passwords, please submit a helpdesk request by clicking on the help icon, question mark, located in the top right hand corner of the Login page on the Employee Express website.
Form 1095-C, Employer-Provided Health Insurance Offer and Coverage will be available for viewing and printing in Employee Express by January 13, 2023. To ensure protection of personally identifiable information (PII), please elect electronic 1095-Cs in EEX prior to December 23, 2022. In addition, hard copy Form 1095-Cs will be mailed no later than March 2, 2023, for all employees who did not elect to turn off the hard copy form. Printed Form 1095-Cs will be sent to the employee’s address of record. More information can be viewed at the IRS site at https://www.irs.gov/forms-pubs/about-form-1095-c.
Form W-4 Claiming Exempt Withholding
To continue an exemption from withholding in 2023, the Internal Revenue Service (IRS) requires those claiming exemption from withholding to fill out a new Form W-4, no later than February 10, 2023. If a new Form W-4 has not been entered into EEX or the FPPS between January 1 and February 10, 2023, the employee’s federal withholdings status will be changed to the highest possible withholding. The IRS has not yet updated the 2023 Form W-4 but once available, it may be viewed at www.irs.gov/pub/irs-pdf/fw4.pdf. The Federal Income Tax Withholding Formula for wages paid in 2023 will be updated soon on our Payroll Operations website. Employees contributing pre-tax deductions should subtract their biweekly pre-tax contributions from their biweekly gross pay before utilizing the formula.
State and Local Taxes
We encourage every employee to review their Leave and Earnings Statement to ensure that taxes are being withheld from the correct state and/or locality. If taxes are being withheld for the incorrect state or locality, you should correct the information immediately in Employee Express and contact the Customer Support Center as soon as possible. The Payroll Office has a limited capability to correct prior year tax errors, and 2022 errors not identified until 2023 may require the employee to file a tax return to recover taxes withheld for the wrong tax entity. Wages for non-taxing states are not reported on Form W-2s.
Voluntary Tax Allotments
Since these allotments are remitted to the locality on the employee’s behalf, the amount of ‘estimated’ tax deductions withheld through a Voluntary Tax Allotment will be reflected on the Form W-2, Box 14, item 8 - Estimated Local Tax. These amounts are only estimated. Reconciliation occurs when the employee files an applicable tax return with the locality.
Social Security (OASDI) Tax
The 2023 Social Security wage base for OASDI increased to $160,200. There is no wage base limit for Medicare tax. For 2023, the Social Security tax rate remains 6.2%, and the Medicare tax remains at 1.45% for all wages. Additionally, any earnings in excess of $200,000 will be taxed an additional 0.9% Medicare tax. The tax rates shown above do not include this additional 0.9%. More information about this tax can be found at 2023 Social Security Changes - COLA Fact Sheet.
Occupational Privilege Tax
Certain localities require that an Occupational Privilege Tax be taken from employees in their jurisdiction. The occupational privilege tax is levied when working within a specific district. While some localities withhold the tax in the first full pay period of the year, the actual deduction will depend on the locality’s withholding requirements.
Aggregate Pay Limitation
As a reminder for 2023, the statutory limit on pay applies to most employees exempt from the Fair Labor Standards Act (FLSA) (see 5 U.S. Code 5307). Even though basic pay is never cutback, some allowances, differentials, bonuses, or awards may even cutback and be deferred to the following year. Retention, recruitment or relocation incentives authorized under 5 U.S. Code 5753 and 5754, which may cause employees to exceed the aggregate limitations on pay may also be reduced or suspended. The aggregate pay limitation is generally Level 1 of the Executive Schedule.
Annual Premium Pay Limitation
As a reminder for 2023, the annual premium pay limits defined in 5 U.S. Code 5547(b) apply. For employees exempt from the FLSA, if regular pay projected for the year plus Title 5 overtime, night differential, standby pay, availability pay, administratively uncontrollable overtime, Sunday Premium, or Holiday worked reach the limits, no additional premium pay may be paid. Compensatory time may not be substituted for overtime that is not payable. The annual pay limitation is the greater of the annual rate of GS-15, step 10 for each locality, or the Level V of the Executive Schedule.
The IRS has not yet announced the 2023 rates as they are contingent on legislation that has not been finalized. Once the rates are available, they will be listed in the Publication 15-B (2023), Employer’s Tax Guide to Fringe Benefits.
FEHB coverage authorized in 2022 automatically continues in 2023, though some premiums may change for 2023. Coverage under a new health plan will be effective the first day of the pay period beginning on or after January 1, 2023; for IBC and its clients, this will be January 1, 2023, pay period 2023-02. Enrollees will remain covered and receive the 2022 benefits of the previously elected plan until coverage under the new plan becomes effective.
Flexible Spending Accounts
Pre-tax deductions for the Flexible Spending Accounts program will automatically stop after 2022 pay period 26 unless reauthorized by the employee. A new FSA election would have had to be made during Open Season (November 14 through December 12, 2022) for pre-tax deductions to occur in 2023. For additional information and/or make open season changes, employees can go to www.opm.gov/healthcare-insurance/flexible-spending-accounts.
Dental and Vision Benefits
Dental and vision coverage authorized in 2022 automatically continues in 2023, though some premiums may change for 2023. For additional information, to view the new rates or make open season changes, employees can go to www.benefeds.com.
Thrift Savings Plan (TSP) – Traditional and Roth Contributions
The 2023 elective deferral limit for the TSP increased to $22,500. The combined total of tax-deferred traditional and Roth after-tax contributions cannot exceed the elective deferral limit in any year. Authorized biweekly contribution amounts or percentages will automatically carryover from 2022 into 2023 unless changed or canceled by the employee. Employees who reach the IRS maximum contribution limit before the end of the year will not be able to have further employee contributions and may lose any government matching contributions for the rest of the year. Deduction changes for PP 2023-01 can be made now through Employee Express by entering “12/18/2022” in the Future Effective Date field. Employee Express allows changes to the Effective Date up to 90 days in advance. Employees can change deductions at any time in Employee Express.
Spillover Method for TSP Catch-Up Contributions - Formerly Thrift Catch-up Contributions (TCC) and Roth Savings Catch-up (RSC)
Beginning January 1, 2021, the Federal Retirement Thrift Investment Board implemented a new method for catch-up contributions called the “spillover”. Spillover will apply to all active employees who are at least 50 years of age, or older, and exceed the IRS annual deferral limit. Employees will receive government matching contributions in the spillover method. Eligible employees will have contributions automatically count toward the IRS catch-up limit.
Catch-up contributions can be made up to an extra $7,500.00 annually in 2023. Once the $22,500 elective deferral limit for TSP is reached, any additional contributions “spillover” into the extra $7,500 Catch-up limit. No elections will need to be entered into EEX like previous years. However, spillover contributions should be included with regular traditional and/or Roth contributions when making elections in EEX. Please refer to the ‘Thrift Savings Plan (TSP) – Traditional and Roth Contributions’ section above, regarding government matching contributions and when updates should be entered into Employee Express.
The chart below provides two examples (dollar amount contributions) for calculating PP election amounts in EEX. In each scenario, the TSP Traditional Maximum contribution must be met before any Catch-up contributions can “spillover”:
Example 1: 2023 Maximum TSP Traditional Contributions and Maximum Spillover Contributions
PP Dollar Amount Contribution
Maximum TSP Traditional (Pre-Tax) contributions met:
Maximum Spillover Catch-up contributions*:
Total Maximum contributions allowed:
26 PPs in 2022 (Due to the maximum contribution allowed, the last PP of 2022, PP2022-26, would have a reduced contribution of $1,025)
Example 2: 2022 Maximum TSP Traditional Contributions with Some Spillover Contributions
PP Dollar Amount Contribution
Maximum TSP Traditional (Pre-Tax) contributions met:
Spillover Catch-up contributions* (not maxed):
26 PPs in 2022
* Must meet TSP Traditional max prior to contributing to spillover.
Federal Employees Group Life Insurance (FEGLI)
There are no changes to the FEGLI rates. You can view the rates at OPM’s life insurance site.
All federal employees participating in the CFC are directed to one centralized giving system. To sign up, select charities and set up new donor contributions, visit cfcgiving.opm.gov/welcome no later than January 14, 2023. According to 5 C.F.R. 950.701, payroll deductions will begin with the first pay period after January 15, 2023 (PP 2023-04), and end with the last pay period that includes January 15 of the following year (PP 2024-03) for 26 pay periods.
If you have any questions, please contact your servicing Human Resources Specialist.