What is the social security wage base limit for the tax year 2020?
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Last modified 7/16/2020 4:42:32 AM EST
Every year in the United States, the Social Security Administration revises the taxable earning amount concerning the national average wage index. According to it, when the cost of living increases, the taxation earning amount also increases. So, for the year 2020, the Social Security Wage Base Limit is fixed as $137,700, which means an individual(employee) who earns equal to or above this wage base limit has to pay $8,537.40 as social security tax. And, the employer contribution is also the same. The maximum taxation earning limit is also applicable for the contribution and benefit plans. To know more about the wage limit, click here.
If Mr.A is earning $200,430 annually for the tax year 2020, then he has to pay a social security tax of $8,537.40 since his earning exceeds the Social Security Wage Base limit of $137,700.
Note: The employee and employer contribution to social security tax is 6.2 percent each.