“Social Security Wage Base Increasing in 2022”

– The wage base for computing Social Security tax will increase to $147,000 for 2022, up from $142,800 for 2021.
– Wages and self-employment income above $147,000 are not subject to Social Security tax.
– The FICA tax rate for employers in 2022 is 7.65% — 6.2% for Social Security and 1.45% for Medicare.
– An employee will pay 6.2% Social Security tax on the first $147,000 of wages, and 1.45% Medicare tax on the first $200,000 of wages.
– Self-employed individuals will pay 12.4% OASDI on the first $147,000 of self-employment income, and 2.90% Medicare tax on the first $200,000 of self-employment income. – An employee with more than one job will have taxes withheld from multiple employers.
– An employee cannot ask an employer to stop withholding Social Security tax once the wage base threshold is reached.
– Each employer must withhold Social Security taxes from the individual’s wages, even if the combined withholding exceeds the maximum amount for the year.
– The employee will receive a credit on their tax return for any excess Social Security taxes withheld.
– KSDT CPA offers assistance with payroll tax filing and payments to ensure compliance.

Employers: The Social Security wage base is increasing in 2022