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In 2024, you'd have owed a 6.2% tax on all of your income up to $168,600, and anything above that wouldn't have been subject to Social Security tax. In 2025, with the wage base limit going up to ...
For people who earned between $168,600 and $176,100 in 2024 and will continue to earn that amount in 2025, this new wage base limit means that more of their income will be subject to Social ...
Here’s a breakdown of FICA taxes: Social Security tax: Both you and your employer contribute 6.2 percent of your wages up to a capped amount called the taxable maximum ($168,600 in 2024). This ...
In 2020, the Social Security Wage Base was $137,700 and in 2021 was $142,800; the Social Security tax rate was 6.20% paid by the employee and 6.20% paid by the employer. [1] [2] A person with $10,000 of gross income had $620.00 withheld as Social Security tax from his check and the employer sent an additional $620.00. A person with $130,000 of ...
The wage base limit in 2024 is $168,600, so any amount earned above this is exempt from Social Security taxes and not used to determine your monthly Social Security benefit.
The Social Security component of the FICA tax is regressive. That is, the effective tax rate regresses, or decreases, as income increases beyond the compensation limit or wage base limit amount. [77] The Social Security component is a flat tax for wage levels under the Social Security Wage Base (see "Regular" employees above). Because no tax is ...
The new wage base limit, which will be in effect in 2025, is $176,100, up from the $168,600 limit in 2024. This means more income of some workers will be subject to Social Security payroll taxes.
People hoping to receive the maximum Social Security benefit need to ... Wage Base Limit. 2025. $176,100. 2024. $168,600 ... Social Security payroll taxes on any income above the wage base limit ...