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What is a Social Security income base?
When did the Social Security earnings limit change?
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See here for a complete historical list of the Social Security Wage Base. (**) Since 1990, the employer & employee share has usually been 6.2% each for a 50/50 split of the 12.4% combined total. The changes shown below applied In 2011 and 2012 when the rates were temporarily lowered to 4.2% for the employee (but remained at 6.2% for the employer).
Historical Social Security Tax Rates, 1937 to 2022 [1] Source: Social Security Administration. Contribution And Benefit Base. https://www.ssa.gov/OACT/COLA/cbb.html Notes: [1] The tax rate refers to the combined rate for employers and employees. [2] . OASDI refers to the "Old-Age, Survivors, and Disability Insurance" program.
Listed below are the maximum taxable earnings for Social Security by year from 1937 to the present. Year. Maximum Taxable Earnings. 1937-1950. $3,000. 1951-1954. $3,600.
YearMaximum Taxable Earnings2024$168,6002023$160,2002022$147,0002021$142,800Since its inception, Social Security has featured a taxable maximum (or "tax max"). In 1937, payroll taxes applied to the first $3,000 in earnings. In 2011, payroll taxes apply to the first $106,800 in earnings. This policy brief summarizes the changes that have occurred to the tax max and to earnings patterns over this period.
- Although Social Security has included a tax max since its inception, it was not included in the plan drafted by President Roosevelt's Committee on...
- Policymakers have used three common measures of tax max earnings values: nominal dollars, inflation-adjusted dollars, and wage-adjusted dollars. Ch...
- The proportion of above-max earners in a given year has fluctuated since Social Security began in 1937. There were sizable changes in the percentag...
- Current policy discussions often focus on targeting the tax max to cover a specific share of economy-wide earnings, such as 90 percent of covered w...
- To delve further into the trend in earnings distributions discussed above, we analyze the relationship between above-max earnings and below-max ear...
From 1977 to Now: The Modern Way the Earnings Limit Evolves. The 1977 amendments earnings limit changes focused on allowing older Americans to access much-needed Social Security benefits to supplement their retirement incomes. The House passed a bill eliminating the earnings limit at age full retirement age.
This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. This amount is also commonly referred to as the taxable maximum. For earnings in 2024, this base is $168,600.
Earnings base - The maximum amount of annual earnings on which employees, employers, and self-employed people pay Social Security taxes and which can be counted in figuring Social Security benefit amounts. The base is $76,200 in 2000 and will be adjusted each year to rise in proportion to average wages.
