On October 30, 2013 the Social Security Administration (SSA) announced there will be a $3,300 increase in the Social Security and Disability Insurance taxable wage base for 2014. In addition, there will be a 1.5% cost of living increase for the more than 57 million people collecting Social Security benefits.

With the Social Security wage base increase to $117,000 for 2014, the maximum 2014 OASDI tax payable by each employee is $7,254, or 6.2 percent of the wage base. In 2014 each employee is paying 6.2% which is up from the 4.2% 2012 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.  The Medicare tax is 2.35% for employees with wages greater than $200,000 ($250,000 for joint returns; $125,000 for married taxpayers filing a separate return). The employer portion of the Medicare tax remains at a flat 1.45%.