Originally posted by JaxRed
The player payroll number will be low for 2 reasons. I don't have a link handy but all teams have to pay about a 6 million dollar charge for something as part of payroll.
And you have no allowance there for benefits, etc. For example the Reds pay Social Security on all these guys.
And yes, I think you'll find your 13 million figure will be WAY low.
Not just Social Security. Factor in things like medical, dental, life and disability insurance. Furthermore, any smart organization is going to have costs such as workers' comp insurance, tort claims liability insurance, fidelity bonding, etc.
And to answer the specific question about rates and limits for Social Security withholdings, I'd refer everyone to page 15 of IRS Circular E, Publication 15:
Employers pay 6.2% and employees pay an additional 6.2% for Social Security in 2003. The income cap was $87,000.
The Medicare rate is employers 1.45% and employees pay another 1.45%. Note that there is NO INCOME CAP on Medicare. Therefore, if you go with the calculations / estimate that the player payroll was $55,000,000, then the Reds paid almost $800,000
in Medicare payments alone in 2003 on the player payroll portion of the expense ledger.
Fringes are a huge
cost to an employer.
If you want to know why jobs are moving to other nations, it's not just the hourly wages that must be paid - it's also the taxes & benefit costs associated with employing someone in the US of A...