Time to update your payroll systems: SSA has just released the taxable wage base for 2018.
After one of the biggest increases in history in 2017, next year’s limit will only increase moderately by comparison, from $127,200 to $128,700.
The tax rate for wages will remain the same: 6.2 for both employees and employers.
Details for withholding
With the new taxable wage base, Payroll must withhold a maximum of 7,979.40 from employees who are paid $128,700 or more next year. Companies will be pay the same amount.
SSA has also updated the thresholds for the wages of domestic employees and election workers to be taxable.
In 2018, domestic employees must make $2,100 before payroll taxes can be withheld and election workers must make $1,800.
Take note: There won’t be any changes to Medicare payroll tax guidelines for next year. As a reminder, there’s no limit on Medicare taxable earnings. Tax rates for employers and employees are 1.45% each.
More info: www.ssa.gov