Defense Department civilian employees will see a 2 percent reduction in their net pay as a result of the tax package passed by Congress Jan. 1 to avert the fiscal cliff, American Forces Press Service reports.
According to AFPS, the law increased Social Security withholding taxes to 6.2 percent, an increase over the 4.2 percent tax during the “tax holiday” over the past two years.
Military personnel and readiness officials told AFPS active duty and reserve soldiers could either see an increase, decrease or no change in their withholding.
Adjustments in net pay for soldiers are determined by several factors such as increases in basic allowances for housing, subsistence, longevity basic pay raises and promotions, AFPS reports.
Reserve soldiers will be the first to see potential changes in their net pay and those changes will be reflected in their January paychecks, according to the report.
Active duty soldiers will see the adjustments in their January mid-month paycheck and on their January leave and earnings statement.
Civilian workers will see the changes in their paychecks based on the pay period ending Dec. 29, 2012 for pay dates beginning in January.