2017 Social Security Wage Base
For 2017, the Social Security Wage Base is $127,200 (Wage base limit) and 6.2% (Employee social security tax rate).
Effective 2017-01-01Source: Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)Verified 2026-08-29
Compared with 2016
| Item | 2016 | 2017 | Change |
|---|---|---|---|
| Wage base limit | $118,500 | $127,200 | +$8,700 (+7.3%) |
| Employee social security tax rate | 6.2% | 6.2% | +0% (+0.0%) |
Who it applies to
Employees and employers paying Social Security (OASDI) tax on wages earned in 2017
What changed this year, and why
For 2017, the Social Security wage base limit increased to $127,200. The employee tax rate remained 6.2%.
Common questions
- What is the Social Security wage base limit for 2017?
- The Social Security wage base limit for 2017 is $127,200. Only wages up to this amount are subject to the Social Security tax.
- How does the 2017 wage base compare to 2016?
- The 2016 wage base limit was $118,500. The 2017 limit of $127,200 is higher, meaning more of an employee's wages are subject to Social Security tax.
- What is the employee Social Security tax rate for 2017?
- The employee Social Security tax rate for 2017 is 6.2%, unchanged from 2016. The employer pays a matching 6.2%.
Only social security has a wage base
This sentence states that among the payroll taxes discussed in the publication, only the social security tax applies a wage base limit. Medicare tax, by contrast, applies to all covered wages no matter how high. The wage base limit is defined in the same paragraph as the maximum amount of wages subject to the social security tax for the year. For 2017, that limit is $127,200. The employee tax rate is 6.2% on wages up to that ceiling. An employer must stop withholding the employee share of social security tax once a worker's wages for the year exceed $127,200, but must continue to withhold Medicare tax (and income tax) on all wages above that amount. The employer's matching 6.2% share is also capped at the same $127,200 of wages per employee. Because only social security has this cap, high earners can see their combined social security tax stop partway through the year while their Medicare tax withholding continues uninterrupted.
Social security and Medicare taxes have different rates and only the social security tax has a wage base limit. The wage base limit is the maximum wage subject to the tax for the year.
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
An acquisition does not restart the limit
This sentence explains that when a corporate acquisition meets certain requirements, the wages the predecessor paid to transferred employees count as if the successor paid them for purposes of the social security wage base. In practice, this means the successor does not get a fresh $127,200 wage base for each employee. Instead, the employee's wages before the acquisition reduce the remaining amount subject to the 6.2% employee social security tax. The same carryover rule applies to the $200,000 Additional Medicare Tax withholding threshold. The employer must still withhold and pay social security tax on wages up to the $127,200 limit and Medicare tax on all wages for the calendar year. If the predecessor already paid the employee wages subject to social security tax, the successor picks up where that left off. The rule prevents double taxation of wages below the wage base and ensures the employee does not pay more than the annual maximum in social security tax across both employers.
When corporate acquisitions meet certain requirements, wages paid by the predeces- sor are treated as if paid by the successor for purposes of applying the social security wage base and for applying the Additional Medicare Tax withholding threshold (that is, $200,000 in a calendar year).
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
When the employer pays the employee's share
When an employer pays the employee's share of social security tax instead of withholding it from wages, that payment itself counts as additional wages to the employee for social security and Medicare tax purposes. The additional wages are subject to social security, Medicare, and FUTA taxes. For 2017, the employee social security tax rate is 6.2%, and the wage base limit is $127,200. This means that if an employer covers the employee's portion of the tax, those payments increase the employee's total wages subject to tax, which in turn increases the employer's own tax obligations on that additional compensation. The rule applies regardless of whether the employer makes a one-time payment or regularly covers the employee's share throughout the year. This treatment is specific to social security and Medicare taxes and does not apply to federal income tax withholding. Employers must report these amounts as wages on Form W-2 and pay the corresponding employer taxes on the grossed-up amount.
For 2017, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% to- tal). The social security wage base limit is $127,200.
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
Household employers
The household employees table entry explains that domestic service performed in a private home is generally exempt from income tax withholding, though withholding is allowed if both the employer and the household worker agree. The wages are subject to social security and Medicare taxes if the employer pays total cash wages of $2,000 or more in the calendar year. There is no special wage base limit that differs from the general rule: social security tax at 6.2% applies only up to the $127,200 wage base for 2017, and Medicare tax applies to all wages. An exception from social security and Medicare taxes exists if the work is performed by an individual under age 18 during any portion of the calendar year and is not that person's principal occupation. Household employers who do not report employment taxes on the quarterly or annual employer returns instead report FUTA tax on Schedule H (Form 1040).
Household employees: 1. Domestic service in private homes. Farmers, see Pub. 51. Exempt (withhold if both employer and employee agree). Taxable if paid $2,000 or more in cash in 2017. Exempt if performed by an individual under age 18 during any portion of the calendar year and isn't the principal occupation of the employee.
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
Who counts as an employee
This passage defines who counts as an employee for employment tax purposes using common-law rules. A worker is a common-law employee if the employer has the right to control what work is done and how it is done, even if the worker has some freedom in the details. It does not matter whether the worker is full time or part time, or how payment is measured or labeled. If someone working for you is not a common-law employee, certain statutory categories - such as agent drivers, full-time life insurance salespersons, and homeworkers - may still be treated as employees for social security, Medicare, and FUTA tax purposes. For these statutory employees, the employer does not withhold federal income tax but must still withhold and pay social security tax at 6.2% on wages up to the $127,200 wage base and Medicare tax on all wages.
Statutory employees. If someone who works for you isn't an employee under the common law rules discussed above, don't withhold federal income tax from his or her pay, unless backup withholding applies. Although the fol- lowing persons may not be common law employees, they’re considered employees by statute for social secur- ity, Medicare, and FUTA tax purposes under certain con- ditions.
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Publication 15 (2017), (Circular E), Employer's Tax Guide (IRS)
- Wage base limit
For 2017, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% to- tal). The social security wage base limit is $127,200.
- Employee social security tax rate
For 2017, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% to- tal).