On October 16th, 2012 The Social Security Administration (SSA) announced there will be a $3,600 increase in the Social Security and Disability Insurance taxable wage base for 2013. In addition, there will be a 1.7% cost of living increase for the more than 55 million people collecting Social Security benefits.
With the Social Security wage base increase to $113,700 for 2013, the maximum 2013 OASDI tax payable by each employee is $7,049.40, or 6.2 percent of the wage base. In 2012 each employee is paying 4.2% but this rate is set to expire at the end of the year unless Congress passes legislation to extend the 4.2% rate. Currently the employer pays 6.2% of gross pay as well.
The Medicare portion of the Federal Insurance Contributions Act tax continues to apply to all taxable wages earned, and the rate remains at 1.45 percent. Starting in 2013, the Medicare tax will increase to 2.35% for employees with wages greater than $200,000. The employer portion of the Medicare tax will not increase.