2018 Social Security Wage Base
For 2018, the Social Security Wage Base is $128,400 (Wage base limit) and 6.2% (Employee social security tax rate).
Effective 2018-01-01Source: Publication 15 (2018), (Circular E), Employer's Tax Guide (IRS)Verified 2026-08-29
Compared with 2017
| Item | 2017 | 2018 | Change |
|---|---|---|---|
| Wage base limit | $127,200 | $128,400 | +$1,200 (+0.9%) |
| Employee social security tax rate | 6.2% | 6.2% | +0% (+0.0%) |
Who it applies to
Employers and employees subject to Federal Insurance Contributions Act (FICA) taxes on wages paid or received in 2018.
What changed this year, and why
The Social Security wage base limit increased to $128,400 for 2018, up from $127,200 in 2017. The employee Social Security tax rate remained 6.2%.
Common questions
- What happens when an employee's wages exceed the Social Security wage base?
- The Social Security wage base limit for 2018 is $128,400. Once an employee's wages reach this amount during the calendar year, no further Social Security tax is withheld from that employee's pay for the remainder of the year.
- How does the 2018 wage base compare to 2017?
- The employee rate was 6.2% in 2017 as well. The wage base limit was $127,200 in 2017, which is lower than the 2018 limit of $128,400.
Only social security has a wage base
Social security and Medicare taxes are both imposed on wages, but they work differently when it comes to limits. Only social security has a cap on the amount of wages subject to tax, while Medicare tax applies to all wages without any upper boundary. For 2018, the social security wage base limit is $128,400, meaning that only the first $128,400 of an employee's wages during the calendar year are subject to the 6.2% employee social security tax rate. Once wages exceed this threshold, no additional social security tax is withheld on the excess. Medicare tax, by contrast, continues to apply at its designated rate on all wages earned throughout the year, regardless of how high those wages go. There are no withholding allowances for either social security or Medicare taxes, and the amount withheld is determined by multiplying each payment by the applicable employee tax rate. This structure means that high earners pay social security tax on a smaller portion of their total income relative to lower earners, while Medicare tax applies proportionally across all wage levels.
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 (2018), (Circular E), Employer's Tax Guide (IRS)
An acquisition does not restart the limit
When corporate acquisitions meet certain requirements, wages paid by the predecessor are treated as if paid by the successor for purposes of applying the social security wage base. This means the acquiring employer does not start over with a new $128,400 limit for each transferred employee. Instead, wages the predecessor already paid to those employees during the calendar year count toward the same annual cap. The successor employer must account for wages the employee already earned under the prior employer when determining how much of the employee's remaining pay is subject to the 6.2% employee social security tax rate. Without this rule, an employee who switched employers through a qualifying acquisition could have social security tax applied to more than $128,400 in total wages during a single year, because each employer would independently apply the wage base. The provision ensures that the annual wage base works consistently across the full calendar year, regardless of a change in ownership mid-year.
Successor employer. 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 (2018), (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 without deducting it from wages, those tax payments themselves become additional wages subject to social security and Medicare taxes. This means the employer's payment of the employee's 6.2% social security tax increases the employee's total wages for purposes of applying the $128,400 wage base limit. The wage base limit is the maximum wage subject to the tax for the year. Because the employer's payment counts as wages, it accelerates the employee's progress toward reaching $128,400 in cumulative wages. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes. Only the social security tax has a wage base limit, while Medicare tax applies to all wages without an upper cap. This rule ensures that when employers voluntarily cover their employees' social security tax obligations, the tax system still captures the full economic value of those payments as taxable compensation.
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. Determine the amount of withholding for so- cial security and Medicare taxes by multiplying each pay- ment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes.
Publication 15 (2018), (Circular E), Employer's Tax Guide (IRS)
Household employers
Household employees are individuals who perform household work in a private home, local college club, or local fraternity or sorority chapter. For social security and Medicare tax purposes, household employees are subject to the same rules as other employees, including the wage base limit. For 2018, only the social security tax has a wage base limit of $128,400. The employee social security tax rate is 6.2%. Determine the amount of withholding for social security and Medicare taxes by multiplying each payment by the employee tax rate. There are no withholding allowances for social security and Medicare taxes. This means that once a household employee's cumulative wages for the calendar year reach $128,400, no further social security tax is withheld, but Medicare tax continues to apply to all wages earned throughout the year at its applicable rate.
Household employees. If you didn't report employ- ment taxes for household employees on Forms 941, 943, or 944, report FUTA tax for these employees on Sched- ule H (Form 1040).
Publication 15 (2018), (Circular E), Employer's Tax Guide (IRS)
Who counts as an employee
A worker who performs services for you is generally your employee if you have the right to control what will be done and how it will be done. This is true even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. People in business for themselves generally are not employees. However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. If an employer-employee relationship exists, it does not matter what it is called. The employee may be called an agent or independent contractor. It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Employee status under common law determines who is subject to social security and Medicare taxes, including the $128,400 wage base limit for 2018 and the 6.2% employee social security tax rate.
Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed.
Publication 15 (2018), (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 (2018), (Circular E), Employer's Tax Guide (IRS)
- Wage base limit
For 2018, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4%CAUTION ! Page 24 Publication 15 (2018) total). The social security wage base limit is $128,400.
- Employee social security tax rate
For 2018, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4%CAUTION ! Page 24 Publication 15 (2018) total).