The payroll tax rates shown above do not includeĪn additional 0.9 percent in Medicare taxes paid by highly compensated employees on earnings that exceed threshold amounts based on their filing status: Their Medicare portion is 1.45% on all earnings. Note: For employed wage earners, their Social Security portion is 6.2% on earnings up to the taxable maximum.
SOCIAL SECURITY INCREASE FOR 2022 FULL
Self-employed workers pay the entire 12.4 percent.įor employers and employees, the Medicare payroll tax rate is a matching 1.45 percent on all earnings (self-employed workers pay the full 2.9 percent), bringing the total Social Security and Medicare payroll withholding rate for employers and employees to 7.65 percent-with only the Social Security portion limited to the taxable maximum amount.įICA Rate (Social Security + Medicare Withholding) Social Security is financed by a 12.4 percent payroll tax on wages up to the taxable earnings cap, with half (6.2 percent) paid by workers and the other half paid by employers.
FICA tax rates are statutorily set and can only be changed through new tax law. Social Security and Medicare payroll taxes are collected together as the Federal Insurance Contributions Act (FICA) tax. The $4,200 increase for 2022, however, is smaller than the 2021 increase of $5,100, up from the $137,700 maximum for 2020, reflecting constraints on wage increases during the height of the COVID-19 pandemic. The growth of the Social Security wage cap from $127,200 in 2017 to 147,000 in 2022 represents more than a 15.5 percent increase over the past five years. The taxable wage cap is subject to an automatic adjustment each year based on increases in the nationalĪverage wage index (not the inflation rate), calculated annually by the SSA. Posted a fact sheet summarizing the 2022 cost of living adjustments (COLAs). $147,000-up from the $142,800 maximum for 2021, the Social Security Administration (SSA) 1, 2022, the maximum earnings subject to the Social Security payroll tax will increase by $4,200 to
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