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The employer Social Security tax rate and the Social Security Wage Base were not directly impacted by this act, though they did change; only the employee's tax rate changes. This is reflected in the above table, showing the reduction from $6,621.60 to $4,485.60.
[a] [9] The taxation limit in 2020 was $137,700 of gross compensation, resulting in a maximum Social Security tax for 2020 of $8,537.40. [7] This limit, known as the Social Security Wage Base, goes up each year based on average national wages and, in general, at a faster rate than the Consumer Price Index (CPI-U).
The Federal Insurance Contributions Act (FICA) (codified in the Internal Revenue Code) imposes a Social Security withholding tax equal to 6.20% of the gross wage amount, up to but not exceeding the Social Security Wage Base ($97,500 for 2007; $102,000 for 2008; and $106,800 for 2009, 2010, and 2011). The same 6.20% tax is imposed on employers.
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 ...
When viewing your pay stub, you'll likely come across deductions for Federal Insurance Contributions Act (FICA) taxes alongside your income taxes. Some of this money goes toward funding the ...
However, that changes for high earners, just like it does for FICA taxes, with your Social Security taxes only applying to the first $142,800 in earnings and an additional 0.9% Medicare tax on ...
Year. Average Monthly Benefit Among Retired Workers. Maximum Monthly Benefit at Full Retirement Age. 2014. $1,294. $2,642. 2015. $1,329. $2,663. 2016. $1,342. $2,639
Eligibility for receiving Social Security benefits, for all persons born after 1929, requires accumulating a minimum of 40 Social Security credits. Typically this is accomplished by earning income from work on which Federal Insurance Contributions Act (FICA) tax is assessed, up to a maximum taxable earnings threshold.