The Social Security Administration (SSA) announced the new 2018 Wage Limits. SSA Fact Sheet
The maximum amount of wages in 2018 subject to the 6.2% Social Security tax (old age, survivor, and disability insurance) will rise from $127,200 to $128,700, an increase of a little more than 1%. A much smaller increase than the 7% we saw take effect in 2017.
The maximum amount of Social Security tax a taxpayer could pay will therefore increase from $7,886.40 in 2017 to $7,979.40 in 2018, an increase of $93.
There is still no limit on the amount of wages subject to the 1.45% Medicare tax.
It was also announced that Social Security beneficiaries will get a 2% increase in benefits in 2018. A nice bump after only a 0.3% increase in benefits in 2017 and no increase in 2016. The average retiree will receive an increase of $27 a month.
Another plus is the increase to the total wages a worker under full retirement age can earn before their Social Security benefits are reduced. The limit increases to $17,040 for 2018, after which $1 in benefits is withheld for every $2 earned above the limit.