{"id":7043,"date":"2024-10-14T15:52:35","date_gmt":"2024-10-14T15:52:35","guid":{"rendered":"https:\/\/www.brightmine.com\/us\/?post_type=resources&p=7043"},"modified":"2026-06-24T08:01:09","modified_gmt":"2026-06-24T13:01:09","slug":"2025-wage-cap-for-social-security","status":"publish","type":"resources","link":"https:\/\/www.brightmine.com\/us\/resources\/talent-management\/2025-wage-cap-for-social-security\/","title":{"rendered":"2025 wage cap for Social Security payroll taxes going up 4.4%"},"content":{"rendered":"\n
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Written by: <\/p>\n\n\n

Michael Cardman<\/a><\/div><\/div>\n\n\n\n
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As the general rate of inflation continues to slow down, so too does the increase in the Social Security payroll tax wage cap.<\/p>\n\n\n\n

The Social Security Administration (SSA) recently announced<\/a> that the maximum earnings subject to the Social Security payroll tax will increase by 4.4% next year, from $168,600 to $176,100.<\/p>\n\n\n\n

That’s a substantial increase \u2014 but noticeably smaller than the 9.0% increase in 2023 and the 5.2% increase in 2024.<\/p>\n\n\n\n

The SSA also posted a fact sheet<\/a> summarizing the 2025 cost-of-living adjustments (COLAs), which are based on the increase in average wages.<\/p>\n\n\n\n

In 2025, there will continue to be no limit to the amount of wages subject to the Medicare tax rate of 1.45%. In addition, wages that exceed $200,000 ($250,000 for married couples filing jointly) will continue to be subject to the extra 0.9% Medicare tax, which is only paid by employees.<\/p>\n\n\n\n

Employers and employees each contribute into the Social Security retirement system via Social Security and Medicare (FICA) taxes. The total FICA tax rate (6.2% for social security plus 1.45% for Medicare) will remain unchanged at 7.65% for 2025, up to the $176,100 social security taxable wage cap.<\/p>\n\n\n\n

The maximum Social Security tax employees and employers will each pay in 2025 is $10,918.20, which is an increase of $465.00 (from $10,453.20 in 2024).<\/p>\n\n\n\n

Employees whose compensation<\/a> exceeds the current 2024 taxable earnings cap of $168,600 may notice an increase in their FICA withholding beginning next January due to the payroll tax adjustment, resulting in a slight decrease in their net take-home pay.<\/p>\n<\/div>\n\n\n\n

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Written by: <\/p>\n\n\n

Michael Cardman<\/a><\/div><\/div>\n<\/div>\n\n\n\n
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