The Inner Income Service has introduced a rise within the Social Safety wage base to $168,600, up from $160,000.
The Social Safety wage base — the quantity of employee pay that’s topic to a Social Safety payroll tax — is adjusted annually primarily based the nationwide common wage index. The tax fee is 12.4%, break up evenly between employer and worker.
Because the IRS explains in Publication 15, solely the Social Safety tax has a wage base restrict. All lined earnings are topic to a Medicare payroll tax at a fee of two.9%, break up evenly between employer and worker.
Each payroll tax charges are unchanged from 2022. Self-employed people pay each shares of the taxes.
“Contemplating the wage base had a giant enhance in 2022 and, now once more in 2023, we’re paying Social Safety taxes on a bigger quantity of our earnings,” Jeff Bush of The Washington Replace informed ThinkAdvisor on Monday. “Successfully, a tax enhance.”
