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APA Compliance Update: Social Security Wage Increase for 2019

10/15/18 2:47 PM

The Social Security Administration (SSA) announced today that the 2019 social security wage base will be $132,900, which is an increase of $4,500 from $128,400 in 2018 (view the SSA Fact Sheet).  In prior years, there is no limit to the wages subject to the Medicare tax; therefore all covered wages are still subject to the 1.45% tax. As in 2018, wages paid in excess of $200,000 in 2019 will be subject to an extra 0.9% Medicare taxthat will be withheld only from employees’ wages. Employers will not pay the extra tax.

The FICA tax rate, which is the combined social security tax rate of 6.2% and the Medicare tax rate of 1.45%, will be 7.65% for 2019 up to the social security wage base. The maximum social security tax employees and employers will each pay in 2019 is $8,239.80, an increase of $279.00 from $7,960.80 in 2018.

medicare tax

The social security wage base for self-employed individuals in 2019 will also be $132,900. There is no limit on covered self-employment income that will be subject to the Medicare tax. The self-employment tax rate will be 15.3% (combined social security tax rate of 12.4% and Medicare tax rate of 2.9%) up to the social security wage base. In 2019, the maximum social security tax for a self-employed individual will be $16,479.60.

As for FICA, the threshold for coverage under social security and Medicare for domestic employees (i.e., the “Nanny tax”) will be $2,100 in 2019, unchanged from 2018; the coverage threshold for election workers will be $1,800 in 2019, unchanged from 2018.

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