Social Security Wage Base Increases to $168,600 in 2024

The Social Security Administration (SSA) announced that the maximum earnings subject to Social Security (OASDI) tax will increase from $160,200 to $168,600 in 2024 (an increase of $8,400).

The Social Security Administration (SSA) announced that the maximum earnings subject to Social Security (OASDI) tax will increase from $160,200 to $168,600 in 2024 (an increase of $8,400). The maximum Social Security employer contribution will increase by $520.80 in 2024. The $168,600 wage base for 2024 is slightly greater than the wage base forecasted by the SSA’s Office of the Chief Actuary back in April (see Payroll Update, 04/03/2023) [SSA Press Release, Cost-of-Living Adjustment (COLA) Information for 2024, 10/12/2023].

For 2024, the FICA tax rate for both employers and employees is 7.65% (6.2% for OASDI and 1.45% for Medicare).

For 2024, an employer must withhold:

1. 6.2% Social Security tax on the first $168,600 of employee wages (maximum tax is $10,453.20; i.e., 6.20% × $168,600), plus;
2. 1.45% Medicare tax on the first $200,000 of employee wages, plus;
3. 2.35% Medicare tax (regular 1.45% Medicare tax + 0.9% additional Medicare tax) on all employee wages in excess of $200,000 (see Payroll Guide ¶4055 for further information on the 0.9% additional Medicare tax).

Social Security and Supplemental Security Income (SSI) benefits will increase by 3.2% in 2024. The amount of earnings required in order to be credited with a quarter of Social Security coverage will increase from $1,640 to $1,730.

The SSA provided a 2024 Fact Sheet on the changes.

This article originally appeared in Checkpoint’s Payroll Update.

For more information regarding the Social Security Wage Base, see Checkpoint’s Federal Tax Coordinator ¶H-4687.