The One Big Beautiful Bill Act (OBBBA) of 2025 introduces sweeping changes to U.S. payroll and tax law. This white paper breaks down how OBBBA permanently extends key provisions from the TCJA and CARES Act—such as stable tax brackets, unchanged supplemental withholding rates, and the elimination of personal exemptions—while introducing new temporary deductions like “No Tax on Overtime” and “No Tax on Tips” through 2028.

Employers must prepare for updated payroll tracking and reporting requirements, especially around overtime and tip income, and stay alert to evolving IRS guidance and state-level tax conformity. The paper also outlines enhancements to Dependent Care FSAs, educational assistance, and 1099 thresholds, helping payroll teams navigate compliance and maximize employee benefits.