Social Security Wage Base Increases to $176,100 for 2025

The Social Security Administration (SSA) announced on Thursday, October 10, that the 2025 social security wage base will be $176,100, an increase of $7,500 from $168,600 in 2024. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, all covered wages are subject to the 1.45% tax. As in 2024, wages paid in excess of $200,000 in 2025 will be subject to an extra 0.9% Medicare tax that will only be withheld from employees' wages. Employers will not pay the extra tax. Note that the $200,000 threshold for the Additional Medicare tax is not subject to adjustments for inflation.

The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2025 up to the social security wage base. The maximum social security tax employees and employers will each pay in 2025 is $10,918.20, an increase of $465 from $10,453.20 in 2024.

The social security wage base for self-employed individuals in 2025 will also be $176,100. There is no limit on covered self-employment income subject to the Medicare tax. The self-employment tax rate will be 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%) up to the social security wage base. In 2025, the maximum social security tax for a self-employed individual will be $21,836.40.