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As a result, the maximum amount of earnings on which the Social Security tax will be collected will rise from $128,400 to $132,900 for in 2019.
The Federal Insurance Contributions Act (FICA) tax (otherwise known as the Social Security tax) is 12.4%, split equally between employer and employee. But unlike the 2.9% Medicare tax, it is collected on wages only up to a limit, called the “Social Security Contribution and Benefit Base,” or the Social Security wage base. Social Security benefits are adjusted each year for inflation. That adjustment also leads to an increase in the taxable wage base. The 2.9% Medicare tax (1.45% each for worker and employer) is not subject to any wage limit.
More than 62 million beneficiaries will benefit from the increase in Social Security benefits. However, current workers whose earnings exceed the new wage base will experience a rise in their FICA taxes, as will their employers.
Related: Two More U.S. States Conform to Revised Internal Revenue Code
The new wage base will affect gross-up calculations and other payroll calculations for Worldwide ERC® members, as well as increasing their payroll costs.
Worldwide ERC® continues to monitor the impact of the Tax Cuts and Jobs Act on talent mobility programs and policies.
Worldwide ERC®’s Government Affairs Forums meet routinely to keep Worldwide ERC® members up-to-date on issues affecti...
The Supreme Court of Appeal of South Africa ruled that payments made by an amployer for consulting services such as t...
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