Two percent cut to hit working Americans

Unwelcome news is hitting working Americans as they discover their pay is being cut by two percent.

It's a result of the end of a payroll tax holiday.

Your 2 percent pay loss is Social Security's gain.

To figure out how much it will cost you, multiply by two percent, .02, by your gross income.

Divide that by 12 to get your estimated monthly loss.

So, if you're making a $30,000 salary, expect $50 less a month. If you're making $60,000, $100 less a month and so on.

"Payroll tax holiday, that's going away … that's gone," said Mike Conway, Liberty Tax Service franchise owner.

Conway said the feds lowered the payroll tax rate in 2011 from 6.2 percent to 4.2 percent to allow people to keep more cash in their pockets.

"It was when our economy went to pot two years ago and they tried to come up with ways to stimulate the economy," Conway said.

But now that the economy is recovering and the fiscal cliff is averted, Uncle Sam will get back to collecting.

"A two percent increase in the Social Security and Medicare tax," Conway said.

Wells Fargo's Teresa Morris said to further cushion the blow, craft a budget with streamlined expenses for fuel, utilities, eating out and entertainment.

"We would encourage them to go in and speak to their personal banker and really come up with a plan that works best for them and their family," Morris said.

Another change is for Social Security and federal benefits recipients.

Starting March 1, paper checks will no longer be issued.

You must sign up for direct deposit or a Direct Express Debit Mastercard.

If these steps aren't taken, be ready for an interruption in the payment.

If you need help switching to electronic payments, call the Treasury's Go Direct Line at 1-800-333-1795.

For those of you just learning of the overall 2 percent cut in pay, money experts recommend that you make immediate spending adjustments to your budget.

KPLC's Britney Glaser will have more on this at 6 p.m.

Copyright 2013 KPLC. All rights reserved. WMC-TV, in Memphis, also contributed to this article.