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It is also the maximum amount of covered wages that are taken into account when average earnings are calculated in order to determine a worker's Social Security benefit. 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.
This cap is the highest annual income subject to Social Security tax, and the closer your wages are to this limit, the higher your benefit will be. In 2024, the cap is $168,600 per year.
Each calendar year, the wages of each covered worker [a] up to the Social Security Wage Base (SSWB) are recorded along with the calendar by the Social Security Administration. If a worker has 35 or fewer years of earnings, then the Average Indexed Monthly Earnings is the numerical average of those 35 years of covered wages; with zeros used to ...
The general Social Security earnings-test limit in 2025 is $23,400 (up from $22,320 in 2024). You'll have $1 in Social Security withheld for every $2 you earn above that limit.
In 2024, the maximum earnings subject to Social Security taxes was $168,600. This means workers paying into the system are taxed on wages up to this amount, typically at the 6.2 percent rate.
The Board of Trustees of the Social Security Trust Fund released its “2022 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance ...
Why it matters: The RET limits are adjusted annually based on the average wage level, with the result that early claimers (i.e., workers who collect Social Security before FRA) can typically earn ...
The Social Security earnings test withholds benefits from workers under their FRA who claim checks while earning an income over a certain threshold. In 2024, you lose $1 for every $2 you earn over ...