Reminder about Social Security Wage Base - 10/21/08
Payroll staff frequently hear questions from employees about why their net pay went up without a known pay increase. Often the answer involves having paid that tax year’s maximum in Social Security deductions.
Two components of the FICA taxes are withheld from employees’ pay and matched by Purdue University. They are Social Security at 6.2 percent, and Medicare at 1.45 percent. There is a wage base that is subject to Social Security withholding; for 2008, that base is $102,000.
In other words, when any employee reaches $102,000 in Social Security wages, no further Social Security will be withheld for that employee for the rest of that tax year.
As in prior years, there is no limit to the wages subject to the Medicare tax. All wages are still subject to the 1.45 percent.
For more information, please contact Mary Alexander-Conte by phone at 494-1084 or by email at email@example.com; or Linda Mundy by phone at 494-0521 or by email at firstname.lastname@example.org.