Social Security wage base to increase in 2020

11 October 2019

The Social Security wage base will increase from $132,900 to $137,700 in 2020, higher than the $137,100 projected in the April 2019 Annual Report of The Board of Trustees. (See EY Payroll NewsFlash, Vol.20, #055, 4-25-2019; OASDI and SSI program rates & limits, 2020.)

The Medicare tax rate for 2019 remains at 1.45% of all covered earnings for employers and employees. The Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing joint). While employers are required to withhold the additional 0.9% on covered wages over $200,000, there is no employer matching contribution.

For a quick reference chart see below.

For the federal and state rates and limits for 2019 see our special report.

For the complete Social Security Administration fact sheet go here.

Social Security, Medicare and disability insurance contributions

2019 compared to 2020

Description	2019	2020	Increase
Social Security tax rate for employees	6.20%	6.20%	-0-
Social Security tax rate for employers	6.20%	6.20%	-0-
Social Security wage base	$132,900.00	$137,700.00	$4,800.00
Maximum Social Security tax for employees	$8,239.80	$8,537.40	$297.60
Medicare tax rate for employers	1.45%	1.45%	-0-
Medicare tax rate for employees	1.45%*	1.45%	-0-
Medicare tax rate for employees on wages above $200,000*	2.35% (1.45% Medicare +0.9% Additional Medicare)	2.35% (1.45% Medicare +0.9% Additional Medicare)	-0-
Medicare wage base	No Limit	No Limit	N/A

* Employers must withhold the Additional Medicare Tax of .9% of wages over $200,000. There is no employer matching contribution.

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Contact Information
For additional information concerning this Alert, please contact:

Workforce Advisory Services - Employment Tax Advisory Services
• Kenneth Hausser (kenneth.hausser@ey.com)
• Debera Salam (debera.salam@ey.com)
• Kristie Lowery (kristie.lowery@ey.com)

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ATTACHMENT

EY Payroll News Flash

Document ID: 2019-1808