NOTE:The 7.65% tax rate is the combined rate for Social Security and Medicare. Compare the Top 3 Financial Advisors For You, Due to the COVID-19 pandemic, the IRS moved its, If you are looking to make charitable contributions, transfer some of your wealth or leave your estate to your heirs in the most tax-advantageous way, a financial advisor can help. ER FICA(Social Security) Withholding Rate. Some employees pay more Social Security taxes than they need to. For the past couple of decades, however, FICA tax rates have remained consistent. Photo credit: ©iStock.com/GetUpStudio, ©iStock.com/smartstock, ©iStock.com/izusek. Compare your take home after tax and estimate your tax return online, great for single filers, married filing jointly, head of household and widower To calculate your FICA tax burden, you can multiply your gross pay by 7.65%. The amount withheld will be based on the rates set by the local cities and jurisdictions. $137,700.00 . Fortunately, if you’re self-employed, you’ll get to deduct half of the tax (7.65%) when you file your tax return. The Social Security Administration (SSA) has announced that the 2020 Social Security wage base will be $137,700, an increase of $4,800 from the 2019 wage base of $132,900. 2020 Arizona Tax Tables with 2021 Federal income tax rates, medicare rate, FICA and supporting tax and withholdings calculator. The process of wage base limit is a little different for the self-employed as they act as both employee and employer. If you’d like to know more, read our article, Payroll Tax Delay for Coronavirus-Impacted Businesses. FICA (Social Security) Maximum Taxable Earnings (Increased from $137,700 in 2020) $142,800 . For 2020, the social security tax rate is 6.2% (amount withheld) each for the employer and employee (12.4% total). Apart from social security and Medicare taxes, payroll taxes have other tax components mentioned below: The tax withheld from the employee paycheck towards the federal income tax based on Publication 15. | Privacy Policy Excess Medicare tax repayments are nonrefundable since there’s no wage base limit. On the other hand, the Medicare tax rate is much smaller in comparison at 1.45%. This tax is subject to both employees and employers. 2020 Retirement Plan Contribution Limits The following are the maximum annual elective deferrals: Employer FICA Wage Limits and Tax Rates 2020 2019 Social Security (OASDI) wage base $137,700.00 $132,900.00 Medicare (HI) wage base No Limit No Limit They both pay 7.65% (6.2% for Social Security and 1.45% for Medicare) of their income to FICA, the combined contribution totaling 15.3%. Refer to Publication 15, (Circular E), Employer's Tax Guide for more information; or Publication 51, (Circular A), Agricultural Employer’s Tax Guide for agricultural employers. Not to be confused with the federal income tax, FICA taxes fund the Social Security and Medicare programs and add up to 7.65% of your pay (in 2020). The Wage Base Limit helps determine the maximum amount to social security tax to be withheld. FICA Tax Withholding Rates . But, the self-employed individuals are allowed to claim the deduction for half of the social security tax to reduce their taxable income. The maximum social security tax employees and employers will each pay in 2020 is $8,537.40, an increase of $297.60 from $8,239.80 in 2019. They also pay a 2.9% Medicare tax on their entire net earnings. Tax Rates 2019-2020 Year (Residents) The 2019-20 tax rates remain unchanged from the preceding year, and for the following two years. The Federal Unemployment Tax Act (FUTA) is used to fund the federal unemployment program that benefits people who lose their job. Self-Employment Contributions Act (SECA) taxes for self-employed? 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