FICA Limit Up 2.8%; Social Security COL Up

The Social Security Administration announced that the maximum earnings subject to the full 6.2% FICA tax will be $113,700 in 2013, up 2.8% from the $110,100 in 2012. Note that the FICA tax itself had been reduced temporarily to 4.2% in 2012. Next year, the full 6.2% will be collected from the employee, so the maximum FICA tax itself could take as much as $2,425 from many employees. There is no maximum dollar limit on the 2.9% medicare tax (1.45% for employees and employers).

Meanwhile, social security recipients will see only a 1.7% cost-of-living increase in their benefit payments. I’ll leave it to you to form your own opinion on whether or not this makes social security a Ponzi scheme or not.

This entry was posted on Thursday, October 18th, 2012 at 7:46 am and is filed under Self Employment Tax. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

2 Responses to “FICA Limit Up 2.8%; Social Security COL Up”

Norman Chandler says:

January 10, 2013 at 10:56 am

The rate for 2012 is $110,100 not $110,600 as described above.

Please correct.

Thanks!!

Norman Chandler
- Russ says:
  
  January 10, 2013 at 6:47 pm
  
  Thank you for noting the 2012 limit. The 2013 limit is, as noted, $113,700. You can find a complete list of the base wage for Social Security at this link.