On October 18, 2015 the Social Security Administration (SSA) announced there not will be an increase in the Social Security and Disability Insurance taxable wage base for 2016. This is first time in five years that there will be no increase. There will also be no cost of living increase for the more than 65 million people collecting Social Security benefits. It is only the third time in 40 years — all of them during the Obama administration — that the Social Security Administration has not increased its payments. The raises are tied to the consumer price index which has been flat because of lower gasoline prices.
The maximum 2016 OASDI tax payable by each employee remains $7,347, or 6.2 percent of the wage base. In 2016 each employee contribution is matched with an employer contribution of 6.2% of gross pay.
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%.