2023 Social Security Wage Base
For 2023, the Social Security Wage Base is $160,200 (Wage base limit) and 6.2% (Employee social security tax rate).
Effective 2023-01-01Source: Publication 15 (2023), (Circular E), Employer's Tax Guide (IRS)Verified 2026-08-29
Compared with 2022
| Item | 2022 | 2023 | Change |
|---|---|---|---|
| Wage base limit | $147,000 | $160,200 | +$13,200 (+9.0%) |
| Employee social security tax rate | 6.2% | 6.2% | +0% (+0.0%) |
Who it applies to
Employers and employees subject to Social Security (FICA) tax
What changed this year, and why
For 2023, the Social Security wage base limit is $160,200. This is the maximum amount of wages subject to Social Security tax for the year. Wages earned above this amount are not subject to Social Security tax. The employee's share of the social security tax is 6.2% of wages up to that limit, and the employer is charged the same rate on the same wages.
Common questions
- What happens to wages above the Social Security wage base?
- Wages above this limit are not subject to Social Security tax. Once an employee's earnings for the year exceed $160,200, no further Social Security tax is withheld on additional wages.
- Is there a wage base limit for Medicare tax?
- No. Unlike Social Security tax, Medicare tax applies to all covered wages with no upper limit.
- What is the Social Security tax rate for 2023?
- The social security tax rate is 6.2% each for the employer and the employee, and for 2023 it is charged on wages up to the wage base limit of $160,200. Wages above that limit in the same year carry no further social security tax. Medicare tax is charged separately and has no wage base limit, so it keeps applying above $160,200.
Only social security has a wage base
Social Security and Medicare are both payroll taxes, but they apply a cap differently. Only Social Security has a wage base limit - the maximum amount of an employee's wages in a calendar year that can be taxed. Medicare tax applies to all covered wages with no upper cap. For 2023, the Social Security wage base limit is $160,200. Once an employee's cumulative wages with a single employer reach $160,200 during the year, no further Social Security tax is withheld or owed on wages above that amount for the remainder of the year. Both the employer and the employee pay the same Social Security rate on wages up to the limit. Medicare tax continues to apply at its own rate to all wages regardless of total amount. Employers must track each employee's cumulative wages during the year to determine when the Social Security wage base has been met and should then stop withholding and paying the employer's share of Social Security tax on any excess wages. An employee who works for more than one employer may have Social Security tax withheld by each employer separately against the same $160,200 limit, and any excess can be claimed as a credit on the employee's individual income tax return.
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 (2023), (Circular E), Employer's Tax Guide (IRS)
An acquisition does not restart the limit
When a successor employer acquires a business and the acquisition meets certain requirements, wages that the predecessor employer paid to employees before the transfer are counted as if the successor had paid them. This applies specifically to the Social Security wage base. As a result, the successor does not start the $160,200 wage base over from zero for transferred employees. Instead, the employee's cumulative wages with the predecessor reduce the amount of wages the successor can tax for Social Security. For example, if an employee earned wages before the transfer that already used part of the annual cap, the successor only owes Social Security tax on wages up to the remaining portion of the $160,200 limit for that calendar year. The same carryover treatment applies to the Additional Medicare Tax withholding threshold. Successor employers should review whether they need to file Schedule D (Form 941) and should consult the Instructions for Schedule D (Form 941) and Revenue Procedure 2004-53 to determine proper reporting and withholding obligations for transferred employees during the year of the acquisition.
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 (2023), (Circular E), Employer's Tax Guide (IRS)
Household employers
A household employee is someone who performs domestic services in a private home, local college club, or local fraternity or sorority chapter. An employer must withhold and pay Social Security and Medicare taxes on cash wages paid to a household employee when total cash wages reach $2,600 or more in 2023. Social Security tax applies to those wages up to the $160,200 wage base limit for 2023. Once the household employee's total wages from the employer reach $160,200 in the calendar year, no further Social Security tax applies to any additional wages paid that year. Medicare tax continues to apply to all wages with no upper limit. The household employer may choose to also withhold federal income tax from the household employee's wages if both the employer and employee agree to do so, though income tax withholding is not required by default. A household employee who is under age 18 at any point during the calendar year and whose household work is not the employee's principal occupation is exempt from FUTA tax. Household employers who do not report these employees' wages on certain employment tax returns generally report the taxes on Schedule H (Form 1040) rather than on quarterly or annual employment tax forms.
Household employees: 1. Domestic service in private homes. Exempt (withhold if both employer and employee agree). Taxable if paid $2,600 or more in cash in 2023.
Publication 15 (2023), (Circular E), Employer's Tax Guide (IRS)
Who counts as an employee
An individual who performs services is treated as an employee for Social Security and Medicare tax purposes if they meet the common-law test. Under common-law rules, a worker is an employee when the employer has the right to control both what work the worker does and how the worker does it, including the details of the services. This control test applies regardless of the worker's level, salary, how or when payment is made, or whether the worker works full or part time. The IRS looks at behavioral control, financial control, and the relationship between the parties to determine whether a common-law employment relationship exists. If a worker is a common-law employee, the employer must withhold Social Security and Medicare taxes from the employee's wages and must also pay the employer's share of those taxes. Wages paid to a common-law employee are subject to the Social Security wage base of $160,200 for 2023. Workers who do not meet the common-law test may still be treated as statutory employees under certain conditions for Social Security and Medicare tax purposes, even though they are not subject to federal income tax withholding.
Statutory employees. If someone who works for you isn't an employee under the common law rules discussed earlier, don't withhold federal income tax from their pay, unless backup withholding applies. Although the following persons may not be common law employees, they’re con- sidered employees by statute for social security and Medi- care tax purposes under certain conditions.
Publication 15 (2023), (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 (2023), (Circular E), Employer's Tax Guide (IRS)
- Wage base limit
For 2023, 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 $160,200.
- Employee social security tax rate
For 2023, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% to- tal).