The Social Security Wage Ceiling for 2007
Social Security Wage Bases Rises to $97,500 Beginning in 2007, the maximum amount of an employee’s earnings that an employee must pay the Social Security tax on will be $97,500. This represents an increase of $3,300 (or a 3.5% increase) over the 2006 wage base.
The FICA tax rate remains at 7.65% for 2007. The FICA tax rate is composed of two separate payroll taxes, the Social Security tax of 6.2% and the Medicare tax of 1.45%. The maximum Social Security tax employees and employers will each pay in 2007 is $6,045 ($97,500 x 6.2%). This is an increase of $204.60 from the 2006 maximum of $5,840.40. As in prior years, there is no limit to the wages subject to the Medicare tax; therefore, all covered wages are still subject to the Medicare tax rate of 1.45%.
It just keeps going up. Oh how I wish I could take that $6,045 and invest it on my own!
For more on Social Security, check out this piece over on Russell’s blog.