Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits the number of earnings subject to taxation for a given year. This limit is adjusted each year with changes in the national average wage index. This annual limit is called the contribution and benefit base.
For earnings in 2023, the Social Security taxable wage base is $160,200.
FICA | Social Security (OASDI Only)
|Social Security Taxable Wage Base per Employee||$160,200|
|Employer Tax Rate for Social Security||6.2%|
|Employee Tax Rate for Social Security||6.2%|
FICA | Medicare (Hospital Insurance Only)
|Medicare Taxable Wage Base per Employee||No Limit|
|Employer and Employee Tax Rate for Medicare||1.45%|
|Additional Tax on Earning > $200k||0.9%|
FUTA | Federal Unemployment Tax Act
|FUTA Taxable Wage Base per Employee||$7,000|
|Employer Net Tax Rate||6.0%|
Federal Minimum wage Rates*
|Tipped Employee: Minimum Wage||$2.13|
|Tip Credit (Max.)||$5.12|
*Please note some states have minimum wages that are higher than federal rates. For information on state minimum wage rates, click here to view the DOL’s website.
Pension Plan Limits
The federal government sets dollar limits as to how much an employee can contribute to their company’s qualified retirement plan each tax year. These limits are based on the cost-of-living index. If an employee reaches the age of 50 during the current tax year, they will qualify for the “Catch-Up Provision” only if it is an established provision of the company’s 401(k) plan.
Some of these limits have been updated from 2023.
|401(k) Limit for 2022||$22,500||$7,500|
|SIMPLE IRA Plan for 2022||$15,500||$3,500|
*Disclaimer: Please note that this is not all-inclusive. Our guidance is designed only to give general information on the issues actually covered. It is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion. Consult your own legal advisor regarding the specific application of the information to your own plan.
*Please Note: The individual state information included in this guide is up-to-date as of Tuesday, January 24, 2023. Please refer to your state’s official website for more information and potential updates released after January 24, 2023.