[author: Rena Pirsos, XpertHR Legal Editor]
The Social Security Administration (SSA) has announced that the Social Security taxable wage base will be $113,700 for 2013, an increase of $3,600 from the 2012 wage base of $110,100. As a result, nearly 10 million workers will pay higher Social Security taxes in 2013. As in prior years, there is no limit on the amount of wages subject to Medicare tax withholding; all covered wages are subject to Medicare tax at 1.45%. However, in 2013, employees earning more than $200,000 will be subject to an additional 0.9% Medicare tax. Employers will not pay this additional tax.
Unless Congress extends the current employee Social Security tax rate of 4.2% by the end of 2012, that rate will increase to 6.2% for 2013. Thus, the total FICA tax rate for 2013, which is the Social Security tax rate of 6.2% plus the Medicare tax rate of 1.45%, will be 7.65% up to the $113,700 Social Security wage base. In 2013, employers and employees will each pay a maximum of $7,049.40 in Social Security tax. This is an increase of $2,425.20 for employees and $223.20 for employers.
Election and Domestic Workers
For 2013, the FICA coverage threshold for election workers will be $1,600, up from $1,500 in 2012. The threshold for domestic workers will remain unchanged at $1,800.
SSA News Release and Fact Sheet, Oct. 16, 2012.