Q. As a CSRS Offset employee, I understand that once the FICA limit is reached, my retirement contribution will increase as the FICA withholding is decreased as discussed in the following paragraph:
CSRS Offset employees contribute 0.8 percent (.008) of their after-taxed wages to the CSRS Retirement and Disability Fund, and 6.2 percent of their wages is subject to the FICA tax up to the maximum Social Security wage base ($106,800 in 2009). If a CSRS Offset employee earns more than the maximum wage base, then FICA taxes will stop being withheld until the end of the calendar year. CSRS deductions will then increase to the full CSRS rate for the remainder of the calendar year (7 percent during 2009). The FICA tax withholding will resume at the start of the new calendar year and the CSRS deduction will decrease to the offset amount, until the employee again reaches the maximum taxable wage base for that year. The FICA tax is also imposed on some types of wages such as overtime and awards that are not subject to the CSRS retirement contribution rate of 7 percent. This means that an employee’s FICA deduction may stop before the employee’s CSRS deduction reverts to the full amount.
A. You’ll have to check with your payroll office to find out how the calculation was done.
