The Social Security Administration has set the Old-Age, Survivors, and Disability Insurance (OASDI) taxable wage base at $184,500 for 2026, up $8,400 (4.77%) from $176,100 in 2025. Employers must withhold and match 6.2% up to that cap — a maximum of $11,439 per employee in 2026, up from $10,918.20.
What Changes for Payroll
- Wage base: $184,500 — Social Security tax applies only to the first $184,500 of wages per employee per year (separate per employer; an employee with two jobs can be withheld twice, with excess refunded on the return).
- Max withholding: 6.2% × $184,500 = $11,439 employer and $11,439 employee.
- Medicare has no wage cap: 1.45% each, plus an additional 0.9% employee-only Medicare tax on wages over $200,000 (single) / $250,000 (joint) — withheld from the employee, not matched.
- FUTA base stays $7,000 at 6.0% (before 5.4% state credit — net 0.6% for compliant employers).
The 2027 base is already projected at $190,200 by the Board of Trustees, rising to ~$267,000 by 2035 — payroll systems should model annual increases, not a static cap.
What Employers Should Do
- Update payroll tables by Jan 1, 2026 — a missed update under-withholds Social Security for 8,400 of wages per high earner and creates W-2c corrections.
- Communicate to high earners. Employees who hit $184,500 mid-year see a take-home increase when Social Security withholding stops (but Medicare continues, and the 0.9% extra may start at $200K).
- Reconcile FICA by employee. Reconcile withheld and matched Social Security to the capped wages per employee, not to gross payroll — a payroll report that sums uncapped wages will appear to "under-withhold."
Simplify Your Financial Management
Payroll tax caps are a per-employee, per-employer math that changes yearly. Beancount.io keeps payroll postings by employee and tax type in version-controlled plain text — so the $184,500 you withhold to and the $11,439 you match reconcile by person. Get started for free and make every cap a setting, not a correction.