Social Security Wage Base Increases for 2024 (2024)

FAQs

Social Security Wage Base Increases for 2024? ›

Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase 3.2 percent in 2024. Read more about the Social Security Cost-of-Living adjustment for 2024. The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $168,600.

However, for 2024, the wage base goes from $160,200 to $168,600, an increase of $8,400 from the previous year. That is significantly less than the $13,200 increase from 2022 to 2023, which was the largest recorded increase. As a result, the maximum Social Security tax jumps from $9,932 to $10,453.

Using the “intermediate” projections, the board projects the social security wage base will be $174,900 in 2025 (up from $168,600 this year) and will increase to $242,700 by 2033. The formal announcement of the 2025 wage base will not come until mid-October.

As of 2024, employers and employees each pay 6.2% for Social Security and 1.45% for Medicare. That is a total of 7.65% for each party or 15.3% for both parties. If you're self-employed, you must pay the entire 15.3% yourself. The Social Security portion of FICA has a wage limit of $168,600.

This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. This amount is also commonly referred to as the taxable maximum. For earnings in 2024, this base is $168,600.

Social Security and Supplemental Security Income (SSI) benefits for more than 71 million Americans will increase 3.2 percent in 2024.

Stay up-to-date with the annual Social Security wage base because it generally changes each year. The 2024 Social Security wage base is $168,600, up from the 2023 limit of $160,200. After an employee earns above the annual wage base, do not withhold money for Social Security taxes.

Social Security tax FAQs

Social Security income can be taxable no matter how old you are. It all depends on whether your total combined income exceeds a certain level set for your filing status. You may have heard that Social Security income is not taxed after age 70; this is false.

Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

Starting in 2024, tax Social Security benefits in a manner similar to private pension income.

What is the Medicare tax limit for 2024? ›

The wage base limit is the maximum wage that's subject to the tax for that year. For earnings in 2024, this base is $168,600. Refer to "What's New" in Publication 15 for the current wage limit for Social Security wages. There's no wage base limit for Medicare tax.

Social Security Tax Withholding

For 2024, the Social Security tax wage base for employees will increase to $168,600. The Social Security tax rate for employees and employers remains unchanged at 6.2% on wages up to $168,600.

Are Social Security Benefits (Income) Taxable? If your combined income is above a certain limit (the IRS calls this limit the base amount), you will need to pay at least some tax. The limit for 2023 and 2024 is $25,000 if you are a single filer, head of household or qualifying widow or widower with a dependent child.

• If you become disabled before your full retirement age, you might qualify for Social Security disability benefits. You must have worked and paid Social Security taxes in five of the last 10 years.

According to recently released data from the SSA's Office of the Actuary, just over 590,000 retired-worker beneficiaries were receiving $1,298.26 per month at age 62, as of December 2023. That compares to about 2.11 million aged 66 retired-worker beneficiaries who were taking home $1,739.92 per month.

Although Social Security benefits are taxable at the federal level, most recipients haven't had to worry about how to file taxes or pay state income taxes on their benefits. That's the case in 2024 as well, though residents in some states face state taxes on Social Security.

The FICA tax rate, which is the combined Social Security rate of 6.2 percent and the Medicare rate of 1.45 percent, remains 7.65 percent for 2024 (or 8.55 percent for taxable wages paid in excess of the applicable threshold).