The annual earnings ceiling above which Social Security tax (6.2% employee, 6.2% employer) is no longer owed. The wage base is $168,600 for 2024 and is adjusted by the SSA each year for inflation.
Why Social Security Wage Base matters for employers
Once an employee's cumulative wages for the year exceed the Social Security wage base, neither the employer nor the employee owes additional Social Security tax on earnings above that threshold. Medicare tax, however, continues on all wages with no cap, and high earners are subject to the additional 0.9% Medicare tax above $200,000 in wages.
Employers must track each employee's year-to-date Social Security wages and stop withholding and remitting the 6.2% Social Security tax once the wage base is hit. Payroll systems that do not automatically halt Social Security withholding at the wage base create overpayment situations that require correction at year-end.
How BEG handles Social Security Wage Base for clients
BEG Managed Payroll handles Social Security Wage Base as part of a fully managed payroll service at $25-$45 per employee per month. Clients do not need to track compliance rules, filing deadlines, or calculation methods related to Social Security Wage Base on their own. Everything is included. Learn about BEG Managed Payroll.
Frequently asked questions
Do employers have to manage Social Security Wage Base themselves?
No. A managed payroll provider handles Social Security Wage Base as part of full-service payroll. BEG manages this for clients at $25-$45 PEPM with no system migration required.
What happens if Social Security Wage Base is handled incorrectly?
Errors related to Social Security Wage Base can trigger IRS penalties, state agency assessments, or employee disputes. Catching and correcting errors before filing is far less costly than after-the-fact corrections.
How does BEG handle Social Security Wage Base for managed payroll clients?
BEG tracks, calculates, and remits everything related to Social Security Wage Base as part of fully managed payroll. Clients do not need to monitor compliance -- that is included in the service at $25-$45 PEPM.
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About the author
Anthony Moretti is VP of Sales at Business Executive Group, where he builds BEG's managed payroll and HR service verticals for employers across Dallas-Fort Worth and nationwide. He writes the BEG Payroll Glossary to give employers plain-English answers on payroll and compliance.
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