Social Security

If your small business has employees, you may need to budget for higher payroll costs next year, especially if you employ many high earners. The Social Security Administration recently announced that the wage base for computing Social Security tax will increase to $192,300 for 2027 (up from $184,500 for 2026). Wages and self-employment income above this amount aren’t subject to Social Security tax. What’s the Social Security wage base? The Federal Insurance Contributions Act (FICA)

The 2026 Social Security wage base has been released. What’s the tax impact on employees and the self-employed? Let’s take a look. FICA tax 101 The Federal Insurance Contributions Act (FICA) imposes two payroll taxes on wages and self-employment income — one for Old-Age, Survivors, and Disability Insurance, commonly known as the Social Security tax, and the other for Hospital Insurance, commonly known as the Medicare tax. The FICA tax rate is 15.3%, which includes 12.4%