Fiscal Cliff Could Affect Workers' Paychecks

Could be left wondering what they'll be paid, what taxes they owe

Millions of workers may get smaller paychecks come January if lawmakers don't find a way to avoid the looming fiscal cliff—a series of tax increases and spending cuts that will take effect in January without congressional action. Workers will face weeks of uncertainty about their what their true take-home pay will be because if there is no fiscal cliff deal, the Bush tax cuts will expire, and everyone's rates will go up. That will reduce the amount of money paid to workers, because employers will be withholding more. In addition, the temporary payroll tax holiday will also expire, reducing paychecks even more. Work bonuses will also be smaller because the automatic withholding rate will increase to 28 percent from 25 percent. (CNN)

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