The Social Security tax limit is the maximum amount of your income that gets taxed for Social Security each year

Social Security tax applies only to wages up to a certain threshold, called the wage base limit. For 2024, that limit is $168,600. This means if you earn $168,600 or less in a year, all of your wages are subject to the 6.2 percent Social Security tax (your employer pays another 6.2 percent). If you earn more than $168,600, only the first $168,600 is taxed for Social Security—the rest is not.

This limit changes every year. The Social Security Administration adjusts it based on average wage growth in the country. The limit typically rises by a small percentage each January, though some years it stays the same if wages have not grown.

The limit applies to you as an individual, not to your household. If you have two jobs, Social Security tax is calculated on the wages from each job separately, up to the limit. If your combined earnings from both jobs exceed the limit, you may pay more Social Security tax than necessary—but you can claim a credit for the overpayment when you file your tax return.

Key Takeaways

  • The Social Security wage base limit for 2024 is $168,600, and it increases most years based on national wage growth.
  • Only income up to the limit is taxed for Social Security; earnings above it are not subject to the 6.2 percent employee tax.
  • If you work multiple jobs and pay Social Security tax on more than the annual limit across all jobs combined, you can claim the overpayment as a credit on your tax return.
  • Medicare tax (1.45 percent) has no wage limit and applies to all your earnings, unlike Social Security tax.

Why the limit exists and how it affects your benefits

The wage base limit was created as part of how Social Security calculates both what you pay in and what you receive in benefits. Your future Social Security benefit is based partly on your highest 35 years of earnings, but only the earnings up to the wage base limit in each year count toward that calculation. This means very high earners do not pay Social Security tax on all their income, and their benefits do not grow proportionally to their total earnings either.

The limit also affects how much money goes into the Social Security trust fund. Because high earners pay tax only on a portion of their income, the program relies on a broad base of middle and lower-income workers to fund current retirees' benefits. Congress sets the limit as a policy choice about how to balance the program's finances.

How the limit changes year to year

The Social Security Administration announces the new wage base limit in October for the following year. The adjustment is tied to the National Average Wage Index, which measures average earnings across the entire U.S. workforce. If the average wage grows by 3 percent, the wage base limit typically grows by roughly 3 percent as well.

Recent limits show the pattern: the 2023 limit was $160,200, and the 2024 limit is $168,600. The 2025 limit will be announced in October 2024. You can find the current and historical limits on the Social Security Administration's website under "Contribution and Benefit Base."

What happens if you have multiple jobs

If you work two or more jobs in the same year, your employer at each job withholds Social Security tax based only on what you earn at that job. Neither employer knows about your other income. This can result in paying more Social Security tax than the law requires.

For example, if you earn $100,000 at one job and $80,000 at another, you pay 6.2 percent Social Security tax on both amounts—a total of $11,160 in employee Social Security tax. However, your combined earnings of $180,000 exceed the $168,600 limit, so you should have paid tax on only $168,600. You overpaid by $744. When you file your federal tax return, you can claim this overpayment as a credit, and the IRS will refund it or explore it to other taxes you owe.

Self-employed workers and the wage base limit

If you are self-employed, you pay both the employee and employer portions of Social Security tax—a combined 12.4 percent on net self-employment income. The wage base limit still applies. You calculate your self-employment tax on your net earnings (after business expenses), but only up to the annual limit.

Self-employed workers report their income on Schedule C (Profit or Loss from Business) and calculate self-employment tax on Schedule SE. The Social Security Administration uses the same wage base limit for self-employed income as it does for employee wages, so the $168,600 limit for 2024 applies to you as well.

Medicare tax has no wage limit

While Social Security tax stops at the wage base limit, Medicare tax does not. Medicare tax is 1.45 percent for employees (and 1.45 percent for employers), and it applies to all your wages with no upper limit. This means high earners pay Medicare tax on every dollar they earn, even amounts above the Social Security wage base limit.

Additionally, if you earn more than $200,000 as a single filer (or $250,000 if married filing jointly), you pay an extra 0.9 percent Medicare tax on the amount above that threshold. This additional tax was introduced in 2013 as part of the Affordable Care Act. Unlike Social Security tax, there is no wage base limit for Medicare tax at any income level.

How to find the current and past wage base limits

The Social Security Administration publishes the wage base limit each year on its official website at ssa.gov. You can search for "Contribution and Benefit Base" to find a table showing the limit for the current year and all previous years back to 1937. Your employer should also provide this information in your employee handbook or payroll materials.

If you are filing your own taxes or working with a tax professional, the current year's limit is included in IRS publications and tax software. The limit is also shown on your Social Security statement, which you can view online at ssa.gov/myaccount if you create an account.

Frequently Asked Questions

Does the wage base limit affect how much Social Security I will receive?

Yes, but only indirectly. Your benefit is calculated using your highest 35 years of earnings, but only earnings up to the wage base limit in each year count. If you earn significantly more than the limit, those extra earnings do not increase your benefit. However, your benefit is also based on when you start claiming, your work history, and other factors.

What if I did not know I overpaid Social Security tax on multiple jobs?

You can still claim the overpayment as a credit on your federal tax return. If you file your return and do not claim it, you can file an amended return (Form 1040-X) within three years to recover the overpayment. The IRS will refund it or explore it to other taxes you owe.

Does the wage base limit explore to bonuses and overtime?

Yes. All wages, including bonuses, overtime, and commissions, count toward the wage base limit. Your employer withholds Social Security tax on these payments just as they do on regular salary, up to the annual limit.

Will the wage base limit keep increasing?

The limit increases most years based on average wage growth in the United States. Some years it stays the same if wage growth is very low. The Social Security Administration announces the new limit in October for the following year, so you can plan ahead.

Is there a wage base limit for state or local taxes?

No. The wage base limit applies only to federal Social Security tax. State and local taxes, if your state has them, may have different rules or no limit at all. Check with your state's tax authority for information about your state's specific tax rules.