Social Security Tax Limit 2024 – Maximum Wages & Contribution Rates!

SSA declared that in 2024, the highest possible wages that are susceptible to the Old Age Pension and Social Society (OASDI) tax will rise by $8,400, reaching $160,200 to $168,600.

Social Security Tax Limit 2024

The OASDI program of Social Security sets a cap on the entirety of wages that are taxable in a particular year. When such earnings are factored into the total amount of benefits, an identical yearly cap is also effective. 

The term tax-deductible minimum is additionally frequently utilized when referring to this sum. The starting price for revenues in 2024 is $168,600.

According to the statute, both workers and employers will each pay 6.2% of their annual salaries in OASDI taxes in 2024. 

As a result, in 2024, those with jobs receiving $168,600 or higher will be contributing $10,453.20 to the OASDI scheme, with the company they work for matching the payment as well. In 2024, the individual self-employed tax rate for earnings under the OASDI will be 12.4%.

Social Security Benefits 2024

The median quarterly compensation for all retired individuals is projected to rise from $1,848 in 2023 to $1,907 in 2021. A fact section from the Social Security Disability Administration lists the following additional annual approximate average,: 

  • Two elderly people who receive compensation together: $3,033 instead of $2,939.
  • Two youngsters and a widower mother: $3,653, up from $3,540.
  • Widowed aging independently: $1,773 increased from $1,718.
  • Spouse, any number of children, or a disabled staff member: $2,720, up from $2,636.
  • $1,537 for all disabled workers, up from $1,489.

Social Security Tax Limit

How much will Social Security Increase?

In the next year, every beneficiary will receive a raise of 3.2%. This modification will result in 168,600 dollars being the maximum amount of chargeable revenue. On the other hand, there isn’t going to be a limitation on the greatest Medicare-related income that is taxable.

Recipients Before 3.2% increase After 3.2% increase
Aged Couple (both getting benefits) 2,939 dollars per month 3,033 dollars per month
Retired Workers 1,848 dollars per month 1,907 dollars per month
Aged Widow(er) (alone) 1,718 dollars per month 1,773 dollars per month
Disabled Workers 1,489 dollars per month 1,537 dollars per month
partner, one or more kids, and employees with disabilities 2,636 dollars per month 2,720 dollars per month
Widowed Mother and 2 Children 3,540 dollars per month 3,653 dollars per month

In 2024, the monthly cost of Protection will likewise rise, going from 1,640 to 1,730 US dollars. Beginning in 2024, the yearly exemption threshold on retirement savings (for those under the full retirement age) will be $22,320. The prior annual cap for this exception was $21,240.

Social Security Tax Limits Changes 2024

The monetary basis used for the calculation of the tax rate on Social Security is expected to increase from USD 160,200 in 2023 to USD 168,600 in 2024, according to recent utterances from the Department of Social Security. 

  • The salaries and revenue from self-employment over this threshold are exempt from Social Security tax. In 2024, a worker will pay:
  • After deducting 6.2% Social Security tax from the first USD 168,600 in salary,
  • Medicare tax rate of 1.45% on the first USD 200,000 in salary
  • Over USD 200,000 in salary, there is a 2.35% Healthcare tax.

In 2024, people who work for themselves will be subject to the following self-employment tax:

  • Additionally, there is a 12.4% tax on Social Security on the initial USD 168,600 of independent contractors’ income; the maximum amount of tax that can be paid is USD 20,906.40
  • The original USD 200,000 of self-employment earnings, plus 2.90% Medicare fees on the initially USD 250,000 of long independence income on a joint process, or USD 125,000 on a married person filing individually.
  • 3.8% (2.90% normal taxes on Medicare + 0.9% additional Medicare tax) on any self-employed earnings exceeding USD 200,000 (USD 250,000 of combined independent contractors income on a joint process, USD 125,000 for divorced individuals filing individual claims).

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