SSA releases 2018 Social Security wage base and COLA

October 16, 2017

The Social Security Administration (SSA) has announced a $1,200 increase in the Social Security wage base for 2018. The previous wage base of 127,200 will be raised to $128,400. 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 $7,960.80 ($74.40 increase from 2017)
• Self-employed wage base will be $128,400, 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. This article was updated to reflect an SSA 2018 Social Security wage base and maximum Social Security tax change made on November 27 from the original October release.