Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

October 22, 2019
2019-6303

US Social Security wage base to increase in 2020

 The Social Security wage base will increase from $132,900 to $137,700 in 2020, higher than the $137,100 projected in the April 2019 Annual Report of The Board of Trustees. (See EY Payroll NewsFlash, Vol.20, #055, 4-25-2019; OASDI and SSI program rates & limits, 2020.)

The Medicare tax rate for 2019 remains at 1.45% of all covered earnings for employers and employees. The Additional Medicare Tax of 0.9% applies to earned income of more than $200,000 ($250,000 for married couples filing joint). While employers are required to withhold the additional 0.9% on covered wages over $200,000, there is no employer matching contribution.

For a quick reference chart see below.

For the federal and state rates and limits for 2019 see EY's special report.

For the complete Social Security Administration fact sheet go here.

Social Security, Medicare and disability insurance contributions

2019 compared to 2020

Description

2019

2020

Increase

Social Security tax rate for employees

6.20%

6.20%

-0-

Social Security tax rate for employers

6.20%

6.20%

-0-

Social Security wage base

$132,900.00

$137,700.00

$4,800.00

Maximum Social Security tax for employees

$8,239.80

$8,537.40

$297.60

Medicare tax rate for employers

1.45%

1.45%

-0-

Medicare tax rate for employees

1.45%*

1.45%

-0-

Medicare tax rate for employees on wages above $200,000*

2.35%

(1.45% Medicare +0.9% Additional Medicare)

2.35%

(1.45% Medicare +0.9% Additional Medicare)

-0-

Medicare wage base

No Limit

No Limit

N/A

* Employers must withhold the Additional Medicare Tax of .9% of wages over $200,000. There is no employer matching contribution.

———————————————

Contact Information
For additional information concerning this Alert, please contact:

Workforce Advisory Services - Employment Tax Advisory Services

—————————————
ATTACHMENT

EY Payroll News Flash

 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more