The Social Security Administration has announced that the 2012 social security wage base will increase for 2012.  The new base will be $110,100, up from $106,800 where it has been for the past three years.  As in prior years, there is no limit to the wages subject to Medicare.

The combined FICA tax rate will be 7.65% for 2012 (6.2% for social security and 1.45% for Medicare.  The maximum social tax tax employees and employers will each pay in 2012 is $6,826.20.  Please note that the 2011 FICA tax rate was 4.2% for employees and 6.2% for employers under the Tax Relieve Act of 2010, and that the rate is scheduled to be 6.2% for both employees and employers for 2012.  However, bills currently being considered in Congress may change this.

We will keep you updated.

Source:  American Payroll Association, Compliance Update - 10/19/2011