Social Security Wage Base Remains at $118,500 for 2016
The Social Security Administration (SSA) announced on Thursday, that the 2016 social security wage base will be $118,500, unchanged from 2015. The maximum social security tax employees and employers will each pay in 2016 is $7,347.
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 2015, wages paid in excess of $200,000 in 2016 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.
FICA coverage threshold increases for domestic, election workers.
The threshold for coverage under social security and Medicare for domestic employees (i.e., the “Nanny tax”) will be $2,000 in 2016, up from $1,900 in 2015; the coverage threshold for election workers will be $1,700 in 2016, up from $1,600 in 2015.