518-373-4111
Yesterday the Social Security Administration (SSA) announced that the Social Security wage base for 2016 will remain the same as 2015 – $118,500. Two other items remain unchanged from this year: all covered wages are still subject to the 1.45% Medicare tax, and wages paid over $200,000 next year still require an extra 0.9% Medicare tax withheld from employee wages (employers do not pay this extra tax).
The FICA tax rate will also be unchanged from 2015 – it will still be the combined Social Security tax rate of 6.2% with the 1.45% Medicare Tax rate, totaling 7.65% up to the maximum Social Security wage base. The maximum Social Security tax is also the same from 2015, $7,347. Employers and employees each pay up to this maximum for 2016.
The Social Security wage base will remain the same for self-employed individuals as well – $118,500. 15.3% will be the self-employment tax rate, reflecting the combined Social Security tax rate of 12.4% with the 2.9$ Medicare tax rate, up to the Social Security wage base. The maximum Social Security tax will be $14,694 for 2016.
For more information on how these items may affect your business, and to learn how GTM can help keep you compliant with tax laws, contact us at (518) 373-4111.
