Social Security wage base increases next year. The Social Security Administration (SSA) announced that the maximum earnings subject to Social Security tax will increase from $118,500 to $127,200 in 2017. Next year, an employer must withhold 6.2% Social Security tax on the first $127,200 of employee wages and 1.45% Medicare tax on the first $200,000 of employee wages. On employee wages in excess of $200,000, employers must withhold 2.35% Medicare tax (regular 1.45% Medicare tax plus 0.9% additional Medicare tax).
