Social Security Wage Base Increases to $113,700 in 2013

The Social Security Administration announced on Oct. 16 that the 2013 Social Security wage base will be $113,700, an increase of $3,600 from the 2012 wage base of $110,100.

As in prior years, there is no limit to the wages subject to the Medicare tax; therefore all covered wages are still subject to the 1.45 percent tax. Wages paid in excess of $200,000 in 2013 will be subject to an extra 0.9 percent Medicare tax that will only be withheld from employees’ wages. Employers will not pay the extra tax.

The Social Security tax rate of 6.2 percent and the Medicare tax rate of 1.45 percent will be 7.65 percent for 2013 up to the Social Security wage base. The maximum Social Security tax employees and employers will pay in 2013 is $7,049.40. This will be an increase of $2,425.20 for employees. The current 2012 FICA tax rate is 4.2 percent for employees under the Middle Class Tax Relief and Job Creation Act of 2012. However, bills currently being considered in Congress may change this in 2013.