What Is the Social Security Wage Base?

The Social Security wage base is the maximum amount of wages or self-employment income subject to the 6.2% Social Security tax in a given year — in 2024, that cap is $168,600. Any wages above that threshold are exempt from Social Security tax for the rest of the year, though they remain subject to the 1.45% Medicare tax (which has no wage cap). The wage base is adjusted annually based on changes in the national average wage index and typically increases each year. For employees who hit the cap early in the year — typically high earners in the first or second quarter — their take-home pay effectively increases for the remainder of the year because Social Security withholding stops. The existence of the wage base cap means higher earners pay a lower effective payroll tax rate as a percentage of their total income than lower earners, since only income up to the cap is taxed for Social Security purposes.