The Social Security Administration (SSA) recently announced that the 2018 Social Security wage base is increasing to $128,400 in 2018, from $127,200 in 2017. The Social Security tax rate will remain at 6.2% for both the employee and employer portions of the tax.
There were no changes made to the Medicare tax; therefore, all taxable wages are still subject to the 1.45% tax for both the employee and employer portions. The Medicare tax does not have a wage limit, and certain employees will be subject to the Additional Medicare Tax after their wages exceed the $200,000 threshold. The withholding rate of 0.9% for the Medicare Additional Tax only applies for employees; employers are not subject to this portion.
For more information, please refer to the links below from the SSA website:
- SSA Press Release: https://www.ssa.gov/news/press/releases/#/post/11-2017-1
- SSA 2018 Fact Sheet: https://www.ssa.gov/news/press/factsheets/colafacts2018.pdf
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NOTE: This blog post was updated on 11/28/17 after the SSA published a new press release. The release communicated that the 2018 social security wage base will be $128,400, and not $128,700 as they originally reported on 10/13/17.