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11 October 2024

Social Security wage base to increase in 2025

The Social Security wage base will increase from $168,600 to $176,100 in 2025, higher than the $174,900 high-cost estimate published in the 2024 Annual Report of the Board of Trustees. (See EY Tax Alert 2024-0936; Social Security Administration Press Release)

The Medicare tax rate for 2025 remains at 1.45% of all covered earnings for employers and employees. The Additional Medicare Tax of 0.9% applies to wages of more than $200,000. While employers are required to withhold the additional 0.9% on covered wages over $200,000, there is no corresponding employer tax.

For the complete Social Security Administration fact sheet go here.

Social Security, Medicare and disability insurance contributions 2024 compared to 2025

Description

2024

2025

Increase

Social Security tax rate for employees

6.2%

6.2%

 -0-

Social Security tax rate for employers

6.2%

6.2%

 -0-

Social Security wage base

$168,600

$176,100

 $ 7,500

Maximum Social Security tax for employees and employers

$ 10,453.20

$10,918.20

 $ 465

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 0.9% of wages over $200,000. There is no corresponding employer tax.

* * * * * * * * * *
Contact Information

For additional information concerning this Alert, please contact:

Workforce Tax Services - Employment Tax Advisory Services

Published by NTD’s Tax Technical Knowledge Services group; Andrea Ben-Yosef, legal editor

Document ID: 2024-1870

 

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