The Social Security Administration (SSA) announced 2018 social security wage base will be $128,700, which is an increase of $1,500 from $127,200 in 2017.
As in 2017, wages paid in excess of $200,000 in 2018 will be subject to an extra 0.9% Medicare tax that will be withheld only from employees’ wages. Employers will not pay the extra tax.
The social security wage base for self-employed individuals in 2018 will also be $128,700. 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 2018, the maximum social security tax for a self-employed individual will be $15,958.80.
FICA coverage threshold for domestic, election workers:
The threshold for coverage under social security and Medicare for domestic employees (i.e., the “Nanny tax”) will be $2,100 in 2018, up from $2,000 in 2017.
If you have any questions or would like additional information, please contact your trusted advisors at Lurie, LLP.