The Social Security Administration (SSA) has announced a $1,500 increase in the Social Security wage base for 2018. The previous wage base of 127,200 will be raised to $128,700. Medicare continues with no limit, meaning all wages are subject to the 1.45 percent tax, unless wages are greater than $200,000 in which case they are subject to an extra 0.9 percent Medicare tax. This only applies to the employee, not the employer.
Other key takeaways:
- FICA for 2018 will be 7.65 percent up to the Social Security wage base
- Maximum Social Security tax for employees and employers will be $7,979.40 ($93 increase from 2017)
- Self-employed wage base will be $128,700, tax rate will be 15.3 percent, maximum Social Security tax will be $15,958.80
Additionally, the SSA also released that the 2018 Cost of Living Adjustment (COLA) for Social Security beneficiaries (over 61 million people) will be 2 percent, which is a significant increase from the 0.3 percent increase in 2017.
For more details, visit https://www.ssa.gov/news/press/releases/#/post/10-2017-1 or call 888-556-0123.