No Change In Social Security and Medicare Wage Bases and Rates for 2011
November 12, 2010
Note: This news item was revised on January 3, 2011 to reflect new information. View the updated news item: Employee Tax Rate for Social Security Reduced to 4.2% for 2011; Other Tax Law Changes Will Impact Employee Take-Home Pay.
The Social Security and Medicare wage bases, the amount of an employee's salary that can be taxed for Social Security and Medicare purposes, will not change for 2011. The first $106,800 of an employee's wages are taxable for Social Security purposes and an employee's entire salary is taxable for Medicare purposes.
Because there is no cost-of-living adjustment for January 1, 2011, the Social Security (full FICA) wage base for 2011 will be the same as the wage base for 2010, $106,800. The Medicare wage base will not have a dollar limit for 2011.
The employer and employee tax rates will remain the same in 2011. The Social Security (full FICA) rate remains at 7.65% (6.20% Social Security plus 1.45% Medicare) for wages up to $106,800. All wages over $106,800 are subject only to the 1.45% Medicare rate. The rate remains at 1.45% for others who are subject only to Medicare.
The University matches the employee contribution rate and amount for both the Social Security and Medicare components. The amount listed on employee earnings statements as SOC SEC is the total of the Social Security and Medicare tax withholding, which is sometimes referred to as Federal Insurance Contributions Act (FICA) tax.
Related Link: Social Security Administration, Maximum Taxable Earnings
Source: UW Service Center and the Social Security Administration
Categories: Retirement