In late October, the Social Security Administration (SSA) announced that the social security wage base for 2015 will increase to $118,500. This is an increase of $1,500 from the 2014 wage base of $117,000.
This increase isn’t the only one happening in 2015. There is no limit to the wages subject to the Medicare tax. All covered wages are subject to a 1.45% tax. Wages paid in excess of $200,000 continue to be subject to an extra 0.9% Medicare tax. This tax is withheld only from employee wages. Employers do not pay any portion of the extra 0.9% tax.
The 2015 FICA tax rate will be 7.65%. The tax rate is comprised of the 6.2% social security tax rate, plus the 1.45% Medicare tax rate. Individuals will be taxed at this rate up to the social security wage base. The maximum social security tax employees and employers each pay is $7,347. This is an increase for employees and employers of $93 from 2014.
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