The Social Security wage base has increased from $132,900 to $137,700 for 2020, which increases the maximum individual contribution by $297.60.
2019 vs. 2020
Social Security and Medicare Contributions
DESCRIPTION | 2019 | 2020 | INCREASE |
Social security tax rate for employers | 6.20% | 6.20% | 0 |
Social security tax rate for employees | 6.20% | 6.20% | 0 |
Social security wage base | $132,900 | $137,700 | $4,800 |
Maximum social security tax for employees | $8,239.80 | $8,537.40 | $297 |
Medicare tax rate for employers | 1.45% | 1.45% | 0 |
Medicare tax rate for employees | 1.45% | 1.45% | 0 |
Medicare tax rate on employee’s wages over $200,000* | 2.35% | 2.35% | 0 |
Medicare wage base | No Limit | No Limit | N/A |
*Employers are required to withhold an additional 0.9% from employee wages in excess of $200,000, but there is not a matching increase on the employer contribution.
View the 2020 Social Security Administration Fact Sheet here.
This information in this communication is general in nature, and is not intended, nor should it be construed, as legal, accounting, tax or other professional advice rendered by GreenSlate, LLC. The reader should contact his or her attorney, CPA, or tax professional prior to taking any action based upon this information.