Social Security Wage Base for 2014

The Social Security Administration (SSA) announced on Wednesday, October 30, 2013, that the 2014 social security wage base will be $117,000, an increase of $3,300 from the 2013 wage base of $113,700.

As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, all covered wages are still subject to the 1.45% tax. As in 2013, wages paid in excess of $200,000 in 2014 will be subject to an extra 0.9% Medicare tax that will only be withheld from employees’ wages. Employers will not pay the extra tax.

The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2014 up to the social security wage base. The maximum social security tax employees and employers will each pay in 2014 is $7,254. This will be an increase of $204.60 for employees and employers.

The social security wage base for self-employed individuals in 2014 also will be $117,000. There is no limit on covered self-employment income that will be subject to the Medicare tax. The self-employment tax rate will be 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%) up to the social security wage base. In 2014, the maximum social security tax for a self-employed individual will be $14,508.