Finance News & Insights

2016 taxable wage base released by SSA

The amount of an employee’s earnings that will be subject to Social Security tax during 2016 is now out from SSA.   

The taxable wage base will remain unchanged at $118,500.

No change in the tax rate, either: 6.2% for employees and employers.

That means if an employee earns $118,500 or more next year, you’ll withhold $7,347 – and your company will pay that same amount.

Certain types of workers have to reach a threshold before their wages are taxable. The SSA announced these earning thresholds for 2016:

  • domestic employees, $2,000, and
  • election workers, $1,700.

Also announced

Although the following amounts don’t affect what’s taxable, here’s how much employees can earn before their retirement benefits are reduced:

  • $15,720 for employees reaching the normal retirement age after 2016, and
  • $41,880 for those reaching the normal retirement age in 2016, up until their birthday month.
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