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Each year, workers pay taxes on income up to a specific amount, called the wage base limit. In 2024, the limit is $168,600 annually, however, limits increase over time based on wage growth.
The Board of Trustees of the Social Security Trust Fund released its “2022 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance ...
For 2024, the Social Security wage base is $168,600, an increase from $160,200 in 2023. Employees pay 6.2 percent of their income up to the wage base, while their employers put up another 6.2 percent.
It is also the maximum amount of covered wages that are taken into account when average earnings are calculated in order to determine a worker's Social Security benefit . In 2020, the Social Security Wage Base was $137,700 and in 2021 was $142,800; the Social Security tax rate was 6.20% paid by the employee and 6.20% paid by the employer. [1 ...
The Federal Insurance Contributions Act (FICA) (codified in the Internal Revenue Code) imposes a Social Security withholding tax equal to 6.20% of the gross wage amount, up to but not exceeding the Social Security Wage Base ($97,500 for 2007; $102,000 for 2008; and $106,800 for 2009, 2010, and 2011). The same 6.20% tax is imposed on employers.
The Social Security Administration collects payroll taxes and uses the money collected to pay Old-Age, Survivors, and Disability Insurance benefits by way of trust funds. When the program runs a surplus, the excess funds increase the value of the Trust Fund. As of 2021, the Trust Fund contained (or alternatively, was owed) $2.908 trillion. [4]
The SSA calculates your benefit based on the 35 top-earning years of your working career, up to the annual wage base. In 2023, the Social Security wage base is $160,200, so the more you earn up to ...
This cost-of-living adjustment, or COLA, reached a record level of 8.7% in 2023, but for 2024, the COLA will only be 3.2%, as inflation has fallen. ... For 2024, the Social Security Wage Base ...