Tier 2 tax rates for railroads, no changes for 2025
Imposed on railroad employees, employers, and employee representatives
The U.S. Treasury Department and IRS published a notice in the Federal Register providing the tier 2 tax rates for 2025 (that is, with respect to compensation paid in 2025).
Tier 2 taxes imposed on railroad employees, employers, and employee representatives are a source of funding for benefits under the Railroad Retirement Act.
There are no changes to the tier 2 tax rates for 2025 (that is, the rates are unchanged from the rates applicable for 2024). The tier 2 tax rates for 2025 are for:
- Employees—4.9% of compensation
- Employers—13.1% of compensation
- Employee representatives—13.1% of compensation