Social Security taxes going to be increased for all workers in 2023

Social Security tax

Employees pay Social Security Taxes only on certain percentage of their income 

Employees

Social Security Administration decides the wage limit to pay social security tax every year

Wage Limit

Wage base for the year 2022 is $147,000

$147,000

In 2022 Social Security tax rate is 6.2% for employees and employers. 12.4% for self-employed.

Tax Rate

If your salary is $200,000/Yr, You are going to pay Social Security Tax only for $147,000

Example

In this scenario,  your Social Security  tax will be $9,114

Example

2018- $128,400

2019- $132,900

2020- $137,700

2022- $147,000

2021- $142,800

Wage Base Limit for last 5 Years

If COLA will increase in 2023, Wage base limit will also increase.

COLA

Based on certain calculations by following the rules of SSA, $155,100 could be new wage base for 2023

$155,100

In this case, this new wage base will be $8,100 higher than wage base limit of 2023

$8,100

Your Social Security tax rate as an employee is 6.2%, so your social security tax in 2023 might be $9616 

$9,616

So you might be end up in paying $502 more Social Security tax by next year

$502