The Social Security Administration announced that the wage base for computing Social Security tax for 2014 will increase to $117,000 from the 2013 wage base of $113,700. This means that, for 2014, the maximum OASDI portion of the FICA tax an employee will pay is $7,254 ($117,000 × 6.2%), and employers will match the employee’s contribution. There is no wage base on the Medicare portion of the tax, so both employers and employees will pay Medicare tax on all wages at a rate of 1.45%. Employees with wages greater than $200,000 will pay an additional Medicare tax of 0.9%. It is estimated that, of the 165 million workers who will pay Social Security taxes in 2014, about 10 million will pay higher taxes because of the increased wage base.
Please contact Martini, Iosue & Akpovi by phone at (818) 789-1179 if you have questions or want more information.