Employment-Social Security Taxable Wage Base Increases To $113,700 For 2013

According to the website of the Social Security Administration, the Social Security taxable wage base, often referred to as the Social Security “contribution and benefit base”, has been increased from to $110,100 to $113,700 for 2013.

The Social Security contribution and benefit base is important because, among other things, it provides a limitation on the amount of wages that may be taken into account each year for purposes of applying Social Security’s Old-Age, Survivors, and Disability Insurance (“OASDI”) taxation. The website states that the OASDI tax rate for wages paid in 2013 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $113,700 would pay $7,049.40 in OASDI taxes in 2013, and his or her employer would pay the same amount. The OASDI tax rate for self-employment income in 2013 is 12.4 percent.