Social Security Wage Base Increases to $117,000 for 2014

Author: Rena Pirsos, XpertHR Legal Editor

Date: October 30, 2013

The Social Security Administration (SSA) announced today that the Social Security taxable wage base will be $117,000 for 2014, as adjusted for inflation. That is an increase of $3,300 from the 2013 wage base of $113,700. As a result, millions of workers will have a greater amount of Social Security tax withheld from their pay by their employers in 2014. The maximum Social Security tax that may be withheld in 2014 is $7,254, up from $7,049.40 in 2013 - an increase of $204.60 for employees and employers. As in prior years, there is no limit on the amount of wages subject to Medicare tax withholding.

The 2014 Social Security and Medicare (FICA) tax rates will not change for 2014. Employers and employees will each continue to pay the Social Security tax rate of 6.2 percent on all wages up to the $117,000 wage base. Employees will continue to pay Medicare tax on all covered wages at the rate of 1.45 percent. Thus, the total FICA tax rate for 2014, which is the 6.2 percent Social Security tax rate plus the 1.45 percent Medicare tax rate, will be 7.65 percent up to the $117,000 Social Security wage base.

An additional 0.9 percent Medicare tax rate applies to single employees who earn more than $200,000 and to married couples who file joint tax returns and earn more than $250,000. High earners, therefore, pay the 1.45 percent Medicare tax rate plus the additional 0.9 percent, for a total Medicare tax rate of 2.35 percent. Employers do not pay the additional 0.9 percent tax.

Election and Domestic Workers

For 2014, the FICA coverage threshold for election workers (generally those who work a few days a year for state or local governments or school or local fire districts) will be $1,600, unchanged from 2013. The coverage threshold for domestic workers (generally cooks, butlers, maids, housekeepers, gardeners etc.) will increase to $1,900, up from $1,800 in 2013.