The social security wage base is increasing for tax year 2017 to $127,200 from $118,500 in 2016. The wage base is adjusted by a complicated formula set out in the social security law. The wage based is indexed annually, based on the national average wage, in addition to several other factors. The wage base will either increase based on the formula or remain the same from one year to the next, but will never decrease. This is a seven percent increase; you may recall there was no increase between 2015 and 2016 and the wage base remained $118,500. The Medicare portion of FICA continues to apply to all wages earned.
Below is a table of the contribution and benefit bases for the past ten years.