The wage base for Social Security tax rises to $184,500 in 2026. This is up from $176,100, according to the Social Security Administration (SSA). Earnings over this limit won’t be subject to Social Security tax.
Employers should take note of these 2026 Social Security changes. If your business employs high income earners, you may need to budget for additional payroll costs.
Social Security overview for employers
The Federal Insurance Contributions Act (FICA) mandates two primary taxes for employers, employees, and self‑employed individuals:
- The Social Security tax, covering Old Age, Survivors, and Disability Insurance (OASDI)
- The Medicare tax, which funds the hospital insurance (HI) trust fund
While the Social Security tax limit in 2026 applies to the annual wage, there are no Medicare tax 2026 thresholds. In 2026, the FICA rate for employers remains 7.65% — comprising 6.2% for Social Security and 1.45% for Medicare.
Updates to Social Security tax rate for 2026
Employees will be subject to these 2026 payroll tax changes:
- 6.2% Social Security tax on wages up to $184,500, with a maximum tax of $11,439.
- 1.45% Medicare tax on all wages (no wage cap)
- 2.35% Medicare tax (1.45% regular + 0.9% additional) on wages above $200,000 ($250,000 for taxpayers who file jointly; $125,000 for married filing separately); unchanged for 2026
Self‑employed individuals will owe:
- 12.4% Social Security tax on self‑employment income up to $184,500, with a maximum of $22,878.00 total tax (employee + employer share combined)
- 2.9% Medicare tax on all net self‑employment income
- 3.8% Medicare tax (2.9% + 0.9% additional) on income above $200,000 (or applicable filing thresholds)
How multiple jobs affect Social Security withholding
Employees working for more than one employer may have excess withheld of the Social Security taxable maximum in 2026. Each employer must withhold taxes independently. When filing their tax return, affected employees can claim a credit or refund for any overpaid Social Security tax.
History of the Social Security wage base
The Social Security payroll tax, introduced in 1937 with a wage base of $3,000, remained unchanged until 1950. As the U.S. economy grew and wages went up, Congress raised the wage base to help the Social Security system. A 1972 amendment linked wage‑base adjustments to the Consumer Price Index.
Historic wage bases include:
- $25,900 in 1980
- $76,200 in 2000
- $137,700 in 2020
- $184,500 in 2026
Annual adjustments since 1972 have reflected long‑term wage growth and inflation.
Need guidance?
If you have questions about payroll tax filing or payments — or want to ensure your business stays compliant — contact your wealth advisor. If you’re not a Mercer Advisors client and would like to learn more, let’s talk.
