On November 27, 2017, the Social Security Administration (SSA) announced that due to its receipt in late October 2017 of approximately 500,000 Form W-2 corrections for tax year 2016, it has now lowered the 2018 Social Security taxable wage base to $128,400, down from the $128,700 it originally announced on October 13, 2017. The employee and employer contribution rates remain the same from 2017 to 2018 at 6.2%.
The revised 2018 wage base of $128,400 is lower than the $130,500 projected in the July 2017 Annual Report of The Board of Trustees.
The Medicare tax rate for 2018 remains at 1.45% of all covered earnings for employers and employees. For wages in excess of $200,000, the Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing joint). While employers are required to withhold the additional 0.9% on covered wages in excess of $200,000, there is no employer matching contribution.
Paylocity will revise these limits at the beginning of 2018 to meet the most current standards set by the SSA.
For more information, please refer to the following link: https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/RatesLimits2018.html.
Thank you for choosing Paylocity as your Payroll Tax partner. Should you have any questions please contact your Paylocity Account Manager.
This information is provided as a courtesy, may change and is not intended as legal or tax guidance. Employers with questions or concerns outside the scope of a Payroll Service Provider are encouraged to seek the advice of a qualified CPA, Tax Attorney or Advisor.