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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 ...
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.
To qualify for the maximum Social Security payout, you’ve got to be a top earner. In fact, you’ll have to earn at least the maximum wage base for at least 35 years. For 2021, the Social ...
While the maximum Social Security benefit as of 2023 is $4,555, very few Americans reach that lofty amount. To do so would require 35 years of earning at the maximum Social Security wage base ...
The taxation limit in 2020 was $137,700 of gross compensation, resulting in a maximum Social Security tax for 2020 of $8,537.40. This limit, known as the Social Security Wage Base, goes up each year based on average national wages and, in general, at a faster rate than the Consumer Price Index (CPI-U).
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 wage base is the maximum amount of income on which Social Security taxes must be paid. Employees must pay 6.2 percent up to that income level, while employers kick in another 6.2 percent.
Maximizing the Social Security benefit in retirement is easier said than done. In 2023, the highest amount a retiree can receive under the program is $54,660 a year.